The contract traded from 27.87 to 29.06 cents, the highest level since January 1981. Volume traded in March reached 54,134 lots at 2:12 pm EST (1912 GMT). James Cordier, analyst for brokers optionsellers.com in Florida, said the close near the highs meant the rally will power the market higher.
"We could hit 30 (cents) this week. There's just not enough supplies (of sugar), said Cordier. Brokers said the initial impetus for the rise was provided by trade and consumer buying. Sugar then hit automatic buy order stops which hoisted sugar over 28.50 cents and eventually vaulted the March contract to 29 cents.
"We hit the interim target of 29 and then backed away a little. But we're not too far so another run toward the highs is possible," a dealer said. The market was well supported by expected buying from No 1 world consumer India, Pakistan, the United States and the Philippines.
The Russia Sugar Producers Union has proposed cutting an import tariff on raws from March to $50 per tonne from $140 to put a lid on rising prices of the sweetener. "At the least, that means the Russians are looking to buy sugar going forward," a broker said.
Technicians see support in the March contract at 28 and 27 cents, with resistance at 29.10 and 30 cents. Total volume Friday reached 60,660 lots, compared with the previous session's 93,274 lots - ICE data. Open interest in the No 11 sugar market stood at 834,018 lots as of January 15, versus the previous 834,649 contracts - exchange data.