Sugar hit its highest price in almost four months on Tuesday, rising almost 5 per cent on the day, after a report of Brazil’s converting more cane into ethanol biofuel.

The Unica industry association of Brazil said sugar production in the world’s top grower fell 14 per cent in the first five months of this year compared with the same period in 2007 – while Brazilian ethanol use more than doubled to 5bn litres.