Tate and Lyle plc has sounded a note of caution on surging corn prices, which could dampen the group’s full-year outlook.

Corn prices have leapt in recent months, as the drought in the US and poor weather conditions in central and eastern Europe are expected to hit harvests.

“It is not clear how the current volatility in the corn price and markets that drive co-product demand and pricing will impact the business over the remainder of the year. As in previous years, we will continue our strategy of maintaining full corn silos in the US to secure supply against the backdrop of tight market conditions,” Tate & Lyle said in a statement ahead of its AGM today (26 July)

The company also provided a trading upate for the first quarter of its new financial year. Tate & Lyle said first-quarter adjusted operating profit was in-line with management expectations.

The company said its sales and volumes had increased in the period at its speciality food ingredients business, as a solid US and emerging market performance offset weakness in Europe. Meanwhile, operating profit at the bulk ingredients business was ahead of expectations.

“Overall, we continue to expect to make progress this financial year while recognising the current level of uncertainty surrounding the wider economy and volatile corn markets,” the company said.