Associated British Foods has again warned that reform of the EU sugar market will weigh on earnings in its current financial year.

The reform helped to cut ABF's profits from its sugar business by GBP30m (US$60.9m) last year and chairman Martin Adamson said earnings would again be affected over the next 12 months.

"Reform of the European Union sugar regime will again have a large negative effect on profit in the coming year," Adamson told the UK-based group's AGM today (7 December).

However, he added: "Beyond the current year we expect the revised shape of the EU sugar regime to bring stability to the European market and the prospect of some profit recovery."

Adamson said trading so far was "fully up to our expectations" for the company's 2007/08 financial year.

"Although there is a greater degree of uncertainty than normal about general economic conditions, including volatility in some commodity prices and currencies, we expect that profits in the rest of the group will show good progress," he said.

Last month, ABF booked an 11% increase in annual profits driven by its African sugar venture and rising earnings from its Primark clothing retail business.