Sugar at 18-month high

Sugar rallied to the highest price in more than 18 months as investors scooped up futures because the sweetener is seen as "cheap'' compared with other agricultural commodities that are reaching records.

Sugar rose 36 per cent in the past year while wheat more than doubled and soybeans jumped 91 per cent. Both reached records today, while corn set a high yesterday.

Speculative net-long positions in sugar, or bets prices will rise, rose 8 per cent in the week ended February 19, government data show.

"There is a general attitude on the part of the speculators that the market, given its relative value to other commodities, is still cheap and attractive,'' said Stephen Platt, a futures strategist of Archer Financial Services in Chicago.

Sugar for May delivery gained 0.32 cent, or 2.3 per cent, to 14.54 cents a pound on ICE Futures US, formerly known as the New York Board of Trade.

After pit trading settled for the day, the price jumped to 14.68, the highest for a most-active contract since August 2006.

Sugar rose the most this year through February 22 among commodities in the Dow Jones-AIG Commodity Index, boosted partly by receiving 16 per cent of index fund agricultural-market investments, according to AIG Financial Products Corp.

Gains in crude oil also support higher sugar prices, Platt said. Rising oil spurs speculation that Brazil may use more of its cane crop to make ethanol instead of sweetener.