Commodities in Focus Weekly: In a sticky situation? Force majeure under sugar contract rules
This is the first in a series of three articles looking at issues currently affecting the sugar market.
The sugar market has recently experienced a rally and for those hoping that the price will fall the outlook is not expected to sweeten any time soon. One factor which is expected to continue to affect the price is weather, and the El Niño climate pattern which has started unfolding in the Pacific Ocean has caught the market's attention. But when will weather be considered an event of force majeure entitling parties to suspend or exempt performance? We consider the force majeure clauses under the Refined Sugar Association Rules and Regulations (the RSA Rules), the Sugar Association of London Rules and Regulations (the SAL Rules), and the ICE Futures U.S. Inc. Sugar No. 11 Rules (the No. 11 Rules) generally and offer guidance on selected issues that may arise under contracts incorporating these standard terms.
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