London, July 31 - Shares in UK sugar maker Tate & Lyle rose more than 5 percent on Monday after Mexico and the United States reached a key trade deal on sweeteners, raising hopes of better prices for sales of its high-fructose corn syrup in the region.
High-fructose corn syrup is a sweetener commonly used in carbonated soft drinks.
An earnings upgrade from U.S. investment bank Goldman Sachs following the firm's July 19 trading update also helped push its shares higher, traders said.
Tate & Lyle shares were up 3.8 percent at 692-1/2 pence by 0900 GMT after rising as high as 706 pence in early trade, to place it among the top FTSE 100 gainers.
Under the sweetener pact, Mexico will give duty-free access to at least 475,000 tonnes of U.S. high-fructose corn syrup in the 15 months beginning Oct. 1 and the United States will admit a similar amount of Mexican sugar duty-free.
Mexico and the United States, which have shared a free-trade agreement with Canada since 1994, had been locked in a dispute over sweeteners for over a decade.
"The important thing for us is that this is another driver in the fundamentals the industry needs for the next commercial pricing round," a Tate & Lyle spokesman told Reuters.
"The fundamentals were looking good in terms of supply and demand but they've been further tightened by this announcement and when you look further out to 2008 they've been tightened again," he said.
Kenneth Smith, who oversees commercial treaties at Mexico's economy ministry told Reuters on Friday that the deal on corn and sugar sweeteners meant Mexico's Congress would probably remove the 20 percent tax that Mexico charges soft-drinks firms to use high-fructose corn syrup.
Goldman Sachs said in a note dated July 30 that it was revising its 6-month share target price to 700 pence from 660 pence after Tate & Lyle said its first quarter results were "well ahead" of the prior year.