Yahoo Finance New York Sugar-Delivery Dispute Ends With Dreyfus Case Dismissed
(Bloomberg) -- A dispute over delays to sugar deliveries sold through a New York exchange ended with a case brought by Louis Dreyfus Co. being dismissed, according to people familiar with the matter.
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The Rotterdam-based company, one of the world’s top agriculture traders, asked Intercontinental Exchange Inc. to intervene due to delays in receiving some of the sugar purchased after March futures expired. But a panel of arbitrators dismissed the request as vessels had been loaded by the time the case was assessed, said the people, who asked not to be identified because the information is private.
The dispute against Wilmar International Ltd. sparked a debate among traders about whether the current exchange rules are sufficient to protect buyers, and highlighted how some traders use technicalities and loopholes in market rules. ICE doesn’t state a time frame for vessels to be loaded as long as the seller pays demurrage, the cost for holding back a vessel — something that’s happened in this case, the people said.
Agriculture commodities traders Sucres et Denrees SA and Dreyfus bought a combined 1.3 million metric tons of sugar in New York when March futures expired. Wilmar was the main seller, delivering more than 80% of that. Dreyfus also purchased the majority of the sugar delivered in May, with Wilmar again selling the bulk of it.
Dreyfus also raised concerns about the potential for similar delays happening in May, and asked for an expedited decision, the people said. The panel of arbitrators, however, decided that there were no grounds that required a quick decision to be made, according to the people.
A Wilmar spokesperson and ICE declined to comment. Dreyfus didn’t respond to a request for comment.
--With assistance from Alfred Cang and Archie Hunter.
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