New York sugar has crossed above 20 cents a pound for the first time in 28 years, helped by talk of rising demand in India, the world's biggest consumer, despite high prices.

Raw sugar for October stood 3.9% higher 20.58 cents a pound in late New York trade on Friday, after touching 20.85 cents a pound earlier, its highest since April 3 1981.

The rise took to 64% its gains since sugar's rally accelerated four months ago, fuelled by concerns about output in Brazil and India, the world's biggest producers.

A weak monsoon has raised concerns of a second year of weak harvest in India, which was held back last by a switch by farmers from sugar cane to grains, turning the country into a net sugar importer.

In London, white sugar hit $539.5 a tonne, a fresh record high since the contract was launched in 1983, before closing up 3.6% at $537.60 a tonne.

'Costlier' imports

India's weather office on Friday forecast that cane growing areas would remain relatively dry over the next five days, with heavier rains hitting eastern and north eastern areas, which are of less agricultural importance.

However, domestic consumption looks likely to rise, despite rocketing prices, Kushagra Nayan Bajaj, joint managing director atBajaj Hindusthan, India's biggest sugar producer, said.

"In my view, international prices will reach about 25 cents per pound," he told Reuters.

"Given that situation, imports will become much more costlier."

Nonetheless, demand would grow 4.3% to 24m tonnes, he added.

'Insufficent' supply

Elsewhere, although, forecasts of drier weather Brazil look more favourable to output, given the heavy rains which have disrupted production, Mexico has added to fears of a tighter market by announcing imports to make up for a weak harvest.

"It has been detected that the national supply of refined sugar could be insufficient to satisfy demand due to a 10.3% reduction in production and an increase in exports to the US market," Mexico's economy ministry said.

Mexican production has been estimated at 4.96m tonnes this year, down from 5.5m tonnes in 2008-09.

Also on Friday, Russia revealed an 86% surge to 54,300 tonnes in white sugar imports during the first half of the yer, although raw sugar imports dropped 16.2% to 904,000 tonnes.