The last echoes of falling food prices, and proceeds from the sale of its dairy division, combined to more than double earnings at Ebro, and put the rice and pasta group on course for healthy full-year growth.

Spain's largest food company said that a 6.6% drop to E1.25bn in turnover during the first nine months of the year reflected "the lowering of raw material prices, which was then passed on in lower selling prices".

Durum wheat, from which pasta is made, and rice were among the worst hit by the weaker farm commodity markets which prevailed during the first half of 2010.

Rice prices have soared by more than one-half in Chicago since the end of June, helped by flooding in China and Pakistan as well as the broader crop rally, while durum values have been buoyed by early-autumn frosts which damaged crop quality in Canada, a major producer.

However, the group was able to profit itself from the falling crop prices, raising its margins over the first nine months, lifting its earnings before interest, tax, depreciation and amortisation (ebitda) by 15% to E197.5m.

Debt slashed 

After receiving the first payment on its E630m sale of its dairy division to France's Lactalis, the group reported earnings more than doubled at E346m.

And Ebro added that it was expecting its earnings for the full year to rise by 120% to E387m, with ebitda up 11% at E271m.

However, the figures were in line with expectations of analysts, who had forecast full-year ebitda at E268m.

And while Ebro also flagged that it is set to end the year with net debts of E70m, even after factoring in special dividends to investors next year and a E120m capital gains tax payment, the results come as the group is attempting to buy Australia-based Ricegrowers for Aus$600m.

The purchase of Ricegrowers, which mills and packs rice and rice flour, as well as manufacturing foods based on the grain, is being viewed as a springboard for Ebro's expansion in the Asia-Pacific region.

Ebro shares stood 0.9% lower at E15.45 in late deals in Madrid.