Sugar Rises in London After U.S. Judge Rules Against Gene-Modified Beets

Sugar rose in New York and London after a U.S. judge ruled against genetically modified sugar beets in the U.S., potentially limiting supplies and spurring more demand for imports.

The ruling on Aug. 13 by Jeffrey S. White in the U.S. District Court for the Northern District of California only applies to future plantings. Genetically engineered sugar beets account for about 95 percent of planted sugar area in the U.S., according to the U.S. Department of Agriculture.

“It’s not bearish,” said Jonathan Kingsman, managing director of research company Kingsman SA in Switzerland. “If someone is looking for a bullish reason to buy, they might buy on this.”

Raw sugar for October delivery climbed 0.05 cent, or 0.3 percent, to 19.47 cents a pound at 8:34 a.m. on ICE Futures U.S. in New York. White, or refined, sugar for October delivery rose $5.50, or 1 percent, to $555.40 a metric ton on NYSE Liffe.

Sugar is already being supported by drought damage in Russia, floods in Pakistan and dry weather in Brazil, Kingsman said. The U.S. court ruling is the “wrong reason” to buy sugar, he said. “There are other better reasons for buying.”

The U.S. Department of Agriculture should have conducted an environmental review before sugar beets were deregulated in March 2005, according to White’s decision. The sugar beet crop is estimated at 4.2 million tons for 2010-11, or 57 percent of total production, compared with 4.1 million a year earlier, according to the USDA.

Cocoa for September delivery fell 1 percent to 2,087 pounds ($3,257) a ton in London. The premium over the December futures contract fell to 72 pounds from a peak of 197 pounds last month. In New York, December cocoa futures declined 1 percent to $2,857 a ton. Robusta coffee for November delivery dropped 0.7 percent to $1,755 a ton on Liffe and arabica coffee for December delivery gained 0.5 percent to $1.7855 a pound on ICE.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net.

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