Things are not so sweet for the U.S. sugar beet market. A federal judge's ruling may prevent farmers from planting genetically modified sugar beets.
The controversy stems from a case in which the Center for Food Safety, Organic Seed Alliance, High Mowing Organic Seeds and the Sierra Club challenged the U.S. Department of Agriculture for allowing farmers to plant GM sugar beets before enough research had been conducted to determine their possible environmental impact. A judge ruled in favor of the environmental groups in August, but by September, the USDA had issued four "non-flowering" permits to growers in Oregon and Arizona -- where most sugar beet seedlings are grown. The action prompted environmentalists to challenge the government in court yet again.
On Friday, Judge Jeffrey White of the U.S. District Court for the Northern District of California will hear more arguments in the case. His ruling could have a significant impact on the industry. Nearly 95 percent of the U.S. sugar beet production is grown from GMO seeds -- a speedy and considerable change from 2005 when the GMO seeds were first approved. Over half of all U.S. sugar production comes from sugar beets; the rest is derived from sugar cane.
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China May Have 2.5 Million-Ton Sugar Shortage, Researcher Says
China may have a refined sugar shortage of 2.5 million metric tons in the 2010-2011 marketing year that needs to be met by imports or selling reserves, the China Merchandise Reserve Management Centre said.
The country's demand is projected to be 14.5 million tons, Xie Liangjun, a researcher at the country's sugar reserve manager wrote in a report posted today on the agency's website. Sugar output may be 12 million tons based on a projection concluded in an industry meeting in Guilin on Nov. 1, Xie wrote.
Output may fall below the projection of 12 million tons and it is "reasonable to be concerned," Xie wrote. Production in the last two years was on average 1.4 million tons less than predictions at the beginning of the season, he wrote.
Guangxi, the region with the biggest output, usually gets frost from late December to mid-January, supporting a "bull market" and prices may climb to previous highs, Xie wrote in the report without elaborating.
Sugar futures traded on the Zhengzhou Commodity Exchange surged 41 percent in the 2009-2010 marketing year between Nov. 1 and Oct. 31. On Nov. 10, the commodity surged to a record 7,518 yuan a ton on increased demand and investments in agriculture. It has since plunged 14 percent after the government introduced measures to curb speculation and cool inflation.
Source: Bloomberg
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