UK group Associated British Foods saw its shares dip today (10 December) after the company issued a cautious trading update.

At its AGM, the company behind brands like Blue Dragon, Kingsmill and Ryvita told investors that trading had been “in line with expectations” over the first two months of the new fiscal year.

However chairman Charles Sinclair said ABF, which also owns the Primark retail chain, said the company remained “cautious” about the outlook for western economies and consumer spending.

Sinclair also noted the recent rise in commodity prices, notably wheat and sugar, although he said higher sugar prices would help profits.

“We have seen, recently, significant increases in some commodity prices. Higher sugar prices are expected to improve our sugar profitability, we aim to recover higher wheat costs, and higher cotton prices will have some impact on Primark’s margins as a result of its continued commitment to offer the best value on the high street,” Sinclair said.

He added: “We continue to invest in the development of our businesses and further returns will be delivered as these investments complete. Last year saw a step change in the group’s profitability and we expect to achieve revenue and profit growth in the current year.”

Before the trading update was announced, ABF shares were up 1.3% on their opening price of GBP11.12. After the update, ABF’s shares fell and, at 14:42 this afternoon, were down 1.3% on their opening price at GBP10.91.