Associated British Foods has issued a third quarter trading update for the 40 weeks to June 24th 2017. It reveals that revenue growth for the AB Agri agriculture division was slightly ahead of the first half when revenues grew 12% to £552 million. However, margins remain under some pressure in both its UK and China feed manufacturing and distribution operations.

Frontier Agriculture, ABF’s arable marketing joint venture with Cargill, was held back in the latest quarter by low UK grain stocks and little market volatility. But the crop input segment of the business performed strongly in the main crop growing period.

The AB Sugar division benefitted from a high world sugar price in the period, although this is now weakening.  UK sugar production from the 2016/17 beet campaign was 900,000 tonnes (1m tonnes in 2015/16), due to a smaller contracted growing area than the previous campaign and lower beet yields. But the company has increased the area contracted for the 2017/18 beet crop by one third, anticipating the end of EU production quotas this autumn. It says the new crop is well established and making good progress.

ABF’s group revenue was 13% up for Q3 and 10% year to date up at constant currencies. “The results to date reflect a material translation benefit from the devaluation of sterling following the result of the UK referendum on EU membership in June last year,” it notes. “At current exchange rates, the translation benefit will be significantly less in the last quarter of our financial year.”