That would be an acceptable justification for confiscating sugar. If Hamas were making rocket fuel somehow out of baby formula, then yes, that would be an acceptable justification.
That said baby formula cannot in fact be meaningfully used to make explosives, so this is not acceptable.
The main ingredient in Hamas' rocket fuel is sugar. https://en.m.wikipedia.org/wiki/Rocket_candy
That would be an acceptable justification for confiscating sugar. If Hamas were making rocket fuel somehow out of baby formula, then yes, that would be an acceptable justification.
That said baby formula cannot in fact be meaningfully used to make explosives, so this is not acceptable.