British Sugar has secured alternate sources of supply but profits will be hit

LONDON (Reuters) - Associated British Foods said on Tuesday a UK sugar production shortfall has forced its British Sugar unit to secure costly alternate sources of supply that will significantly impact second half profits at the sugar business.

AB Foods chief executive George Weston meanwhile told Reuters after the group reported first-half results sugar customers will likely see higher prices in the second half as the price of sugar both locally and globally has surged.

Sugar is used in a wide variety of foods so when its price surges, it creates obstacles for policymakers trying to control food inflation.

Last summer and winter, unusually adverse weather harmed Britain's sugar beet crop.

British Sugar, the only UK firm that processes sugar beet into refined sugar, said its output in the 2022/23 season reached just 0.74 million tonnes compared with 1.03 million in the previous season.

Sources told Reuters on Monday the supply shortfall is keeping Britain's sugar prices at record highs and forcing British Sugar to source from local rival Tate & Lyle Sugars, as well as from as far afield as Thailand.

(Reporting by Maytaal Angel, Editing by Louise Heavens)

By Maytaal Angel