Tate & Lyle, the sugar to sweeteners group, appears to have steadied the business following a torrid year after reporting "satisfactory" trading amid rising commodity and energy prices.

Sir David Lees, chairman at Tate & Lyle, said the company was "on track to make progress", with three out of four divisions trading in line with expectations during the first quarter.

"The general deterioration in global economic conditions, particularly in the US and specifically in raw materials and energy, makes any statement about the outlook more difficult than usual," Sir David will tell shareholders at the company's annual general meeting today.

"Nevertheless, with three months of the financial year behind us and with three of the four divisions having started the year in line with our expectations, we are on track to make progress for the year as a whole."

Tate & Lyle shareholders will be eager to hear about current trading conditions after the company issued three profit warnings last year, which it blamed on rising corn prices in the US where it conducts most of its sweeteners business.

Sir David said: "The group has made a satisfactory start to the financial year with profit before tax for the continuing operations in the first quarter broadly in line with the equivalent period in the prior year.

"At our food and industrial ingredients, Americas division, we benefited from improved by-product returns driven by volatile and exceptionally high corn prices, which have reduced since the end of June", he said.

"The EU sugar businesses, as has been widely reported, are operating in a very difficult market, while surplus stock is absorbed in anticipation of the first reduction in the EU reference prices, which will take place on October 1 2008 (when the raw sugar reference price will also reduce).

"We are increasingly confident that, during the second half of the financial year, market equilibrium between supply and demand for EU sugar will be restored, which should lead to progressively firmer refining margins."

Sir David said approval had been secured for the sale of Tate & Lyle's international sugar trading business to Bunge, the grain and oil seed processor. The division was sold as part of a restructuring programme, aimed at reducing the group's exposure to volatile commodity markets and concentrate on sugar refining.

The business reported an operating profit of £4 million for the three months, compared with a loss of £6 million for the six months to September 30 2007 and a £9 million loss for the year to March 31 2008.

Following the disposal of the international sugar trading operation, Sir David said the group's tax rate for the full year would be about 31 per cent.

Improved co-product prices helped the European food and industrial ingredients division to offset higher energy prices, he added. Hahn and Cesalpinia, the food systems businesses, continued to perform well.

The first quarter included the costs associated with a new facility in Singapore that was commissioned in June 2007.

Group net debt at June 30, 2008 was £967 million against £1 million at March 31 2008.

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