Rises likely as Tate puts up corn sugar

The ingredients manufacturer said it had been forced to raise the price of corn sugar to maintain its profit margins following a 40 per cent rise in the cost of corn over the past year.

Corn sugar – also known as high fructose corn syrup – is a cheaper alternative to sugar and is used as an ingredient in many types of food and drink, such as carbonated drinks, salad dressings, condiments, bread and cereal bars.

The rising price of corn sugar is the latest in a string of commodity price rises that have squeezed consumers' spending power in recent months, after cotton doubled in price in the past year, and wheat increased by 40 per cent, adding 10p to the cost of a loaf.

The consumer prices index (CPI) measure of inflation increased to 3.7 per cent in December and Bank of England governor Mervyn King warned it could hit 5 per cent this year as strong demand from emerging economies drives up the price of commodities, including food.

Updating on the final three months of 2010, Tate, which last year sold its sugar businesses, said the rising cost of corn would tie up more of its money and slow its debt repayment plans.

The company, which also makes sweetener Splenda, said it has started to increase profit margins in its industrial starch business following last year's poor potato harvest.