The price of raw sugar is at its highest level worldwide since March 1981, as supply concerns grow.
Some analysts are predicting the world will run out of sugar this year and in 2010 if the current level of demand continues.
International prices have risen about 80% in the past six months. On Monday, raw sugar futures were being traded about 21.5 cents a pound.
Sugar previously reached a record price of 66c per pound in 1974.
Sucden Financial, a company that focuses on sugar trading, says the main problem is a deficit in sugar supplies.
Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in production in India, have prompted concerns.
According to a report by Sucden, sugar production in India for 2008/09 fell 45% year-on-year. It says a "drastic fall" is expected for the coming Indian crop.
India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops.
The BBC reports there are concerns that the pending sugar crop, which will be ready about November, will be inadequate.
NZ company keeping eye on market
New Zealand's best-known sugar company says it will not be increasing prices just yet.
Chelsea Sugar general manager Bernard Duignan told Checkpoint on Tuesday the company is watching the market closely.
"If the price does stay up at these levels it is a worry. The key thing to remember is this is a very volatile commodity - what goes up very quickly can sometimes come off very quickly.
"We don't know exactly when that will happen - but we're certainly in unchartered territory."
No benefit for Fiji
A low level of sugar production in Fiji is holding the country back from benefiting from the increase in the global price of raw sugar.
The former chairman of the former Fiji Sugar Marketing Corporation, John May, says Fiji's sugar production levels have declined so much it cannot meet demand from countries outside the Pacific region.
He says it could be two years before the industry reaches a government production target of 3.5 million tonnes per season to supply to European buyers.
