Sugar prices touched a 28-year high, with price of raw sugar surging 86% since January this year. Earlier in March 27th, 1981, the price touched 22.44 cents, making it difficult for poor and middle class to survive in inflationary environment.

There are apprehensions about further rise in sugar prices, given the widening demand-supply gap due to decline in sugar production in biggest growers of sugarcane- Brazil and India.

Phil Streible, a Chicago-based broker at Lind-Waldock, a unit of MF Global, said: "Sugar is extending the rally on continued weather problems: Brazil is getting too much rain and India is not getting enough."

Sugarcane production is likely to be adversely affected due to the 'below normal' monsoon in the current crop season. The India MeteorologicalDepartment's Director General, Ajit Tyagi, again painted a gloomy picture of monsoon in the remaining season adding that monsoon will be 87 percent of the long-term average.

Unfavorable weather conditions also hit sugar futures delivery for October; leading it to surge 5.7 per cent on ICE Futures US in New York.

Jim Rogers, chairman of Rogers Holdings, said: "The market has rallied on investor flows due to weather concerns, policy changes in top consumer India and higher energy prices, strong fundamentals but vulnerable to sentiment change."