Case Dismissed in New York Sugar Delivery Dispute
Louis Dreyfus Co.'s Complaint Over Sugar Delays Rejected
A conflict over delayed sugar shipments in New York has been resolved with a case brought by Louis Dreyfus Co. being dismissed, according to sources familiar with the issue.
Louis Dreyfus Co., a major agricultural trading company based in Rotterdam, had asked the Intercontinental Exchange Inc. (ICE) to step in because of delays in receiving sugar they bought after March futures contracts ended. However, arbitrators dismissed the complaint, saying the sugar was already loaded onto ships by the time they looked into it, according to sources who spoke on condition of anonymity due to the private nature of the information.
The dispute with Wilmar International Ltd. led to discussions among traders about whether the current rules protect buyers well enough. It also showed how some traders use loopholes in the rules. ICE’s rules don’t set a specific time for loading ships as long as the seller pays fees for any delays. This fee arrangement was in place in this case, sources said.
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Sucres et Denrees SA and Louis Dreyfus Co. together bought 1.3 million metric tons of sugar in New York when the March futures ended. Wilmar was the main seller, delivering over 80% of that sugar. In May, Dreyfus again bought most of the sugar delivered, with Wilmar as the main seller.
Dreyfus was worried about possible delays in May and asked for a quick decision, according to sources. However, the arbitrators decided that a fast decision was not necessary.
Representatives for Wilmar and ICE did not comment, and Louis Dreyfus Co. did not respond to requests for a statement.
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