Cazenove has lowered its rating of Associated British Foods to 'in line' from 'outperform', noting that earnings prospects are now correctly discounted in the share price.

In a research note, Cazenove said it had concerns about the cost pressures at ABF and a potential shortage of sugar beet in the UK.

The note said that the potential shortfall of beet could see the company have to import from Europe, usually at higher cost. Cazenove also pointed to possible cost increases due to the strong wheat and flour prices in the UK.