Sugar prices are poised for a bounce, and may yet spike back towards 29-year highs, Commerzbank has said, even as Philippines joined other importers in raising doubts over buying intentions, helping the market to fresh lows.

The "somewhat surprising" 30% slide in sugar prices from last month's peak has "gone too far", a report from the German bank said, echoing other observers in blaming the slide on a technically based exit by speculators.

Supply and demand fundamentals pointed to a "persisting physical shortage" of sugar, the briefing said, noting that it had been less than a month since the International Sugar Organisation and sugar merchant Czanikow raised their estimates of the world deficit of the sweetener.

"Prices have reached such low levels that physical demand should pick up again," saying the New York price for raw sugar should average 25 cents a pound in the April-to-June period, with potential for crop scares bringing higher prices.

"Temporary price spikes back towards 30 cents [a pound] can't be ruled out."

Philippine doubts

The report came as Datagro, the crop consultancy, forecast 2010-11 sugar output in Brazil, the world's biggest producer, at 37.3m tonnes.

And the Philippines said it may hold or cancel a plan to import 134,000 tonnes of sugar, after the slump in world prices fed through into the domestic market.

"Why import if the prices have dropped locally?" Rafael Coscolluela, head of the Philippines' Sugar Regulatory Administration, told Reuters.

 "Nobody wants to jump in and invest millions when you're not sure where the market will go."

The comments follow last month's failed Egyptian and Pakistani tenders which have been widely viewed as catalysing the slide in prices by provoking doubts over end demand.

'Fundamentals tightened'

Nonetheless, Rabobank analyst Andy Duff echoed Commerzbank's analysis, saying "there remains a possibility of price rebounds" and forecasting "a lot of volatility in coming months".

"The wider fundamental situation appears, if anything, to have tightened in recent weeks," the bank said

"Although some important buyers such as Pakistan and Egypt failed to go through with tenders in mid‐February, there remains little doubt that they and many other players are running very short of sugar."

Russia, where wholesale prices were approaching $1,000 in Moscow, was set to start raising sugar imports next month.

New York raw sugar for May delivery stood 1.5% lower at 21.71 cents a pound in late deals, with London's May white sugar contract ending down 4.4% at a three-month low of $592.30 a tonne.