Global sugar supplies were already tightening because of the Russian drought, Pakistan’s floods, and weather delays at the ports of top exporter Brazil, when a potentially huge hit to U.S. stocks emerged from the U.S. District Court for the Northern District of California. On August 13, Judge Jeffrey S. White issued a ruling that effectively outlaws the planting of genetically modified sugar beets for the 2011-2012 growing season.
According to the U.S. Department of Agriculture (USDA), the genetically modified sugar beets, called “Roundup Ready” by creator Monsanto because they can withstand the weedkiller, account for about 95% of planted sugar area in the U.S. About half the nation’s sugar supply comes from sugar beets. The U.S. does not rely on homegrown sugar; it is, in fact, the second-ranked net importer of sugar (after Russia) in the world, according to USDA/FAS statistics.
The ruling is the result of a lawsuit brought by advocacy groups opposed to GMOs (genetically modified organisms) in the food supply, led by the Center for Food Safety and including the Organic Seed Alliance and the Sierra Club. The court decided that the USDA should have conducted an environmental review before the GMO sugar beets were deregulated in March 2005. The new ban can be lifted once the USDA conducts such a review, but that can take years to accomplish.
In the commodities markets, the price of sugar has risen on the promise of short supply/high demand for imports. On Thursday, at the behest of sugar users, the USDA lifted restrictions on sugar imports to avert a shortage. The August 19 USDA action extends the period during which sugar imports under the existing tariff-rate quota are permitted by moving the start date to September 1 (a month earlier than the usual October 1 start).
Longer term, the outlook is murky. Right now, U.S. growers warn that there are not enough old-fashioned, non-GMO sugar beet seeds on hand to produce any crop at all next year.
Datamyne can help you track global buyers and sellers of sugar, sugar beets (and seeds, for that matter) – down to the details of individual bills of lading. Ask us to show you how.
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