April 17 (Bloomberg) -- White, or refined, sugar traded at a six-week high in London as crude oil rose to a record, spurring demand for alternative fuel additives such as ethanol. Cocoa and coffee also gained.

Oil jumped after the U.S. Energy Department reported an unexpected decline in the country's crude and gasoline inventories. Higher energy prices fanned speculation Brazil, the world's top sugar cane grower, may focus more on the production of ethanol than white sugar.

``It's a domino effect,'' Richard Lucas, an analyst at Ambrian Partners Ltd. in London, said in an interview today. ``The oil price goes up, so ethanol goes up, and it starts to become attractive to produce ethanol'' at the expense of refined sugar, he said.

White sugar for August delivery rose $3, or 0.8 percent, to $371.50 a ton as of 11:10 a.m. on London's Liffe exchange. That would be the highest close since March 6.

White sugar may jump to $500 a ton this year as high energy prices and increased demand from fast-growing economies such as China boost demand, Lucas forecast.

China consumes an average of almost 10 kilos a year of sugar per capita, while the global average is 22 kilos, Commerzbank AG's Frankfurt-based analysts Eugen Weinberg and Barbara Lambrecht said in a note e-mailed today.

``Demand is expanding rapidly as supply growth is slowing down,'' they said.

Thai Gasohol

Thailand, the world's second-biggest sugar exporter, more than doubled consumption of gasoline blended with ethanol in the first quarter as oil prices rose to records.

The use of the fuel, known domestically as gasohol, jumped to 7.4 million liters a day in the first quarter from 3.6 million a year earlier, the Energy Ministry said in an e-mailed statement today.

A global surplus of sugar may fall faster than estimated as Brazil makes more ethanol and output declines in India and China, the London-based International Sugar Organization has said.

Brazil may harvest a record crop of more than 500 million metric tons of cane in the season that started last month, Leonardo Bichara Rocha, an economist at the ISO, said April 11. The country may divert 44 percent of its crop to making refined sugar, down from almost 46 percent a year ago, according to the ISO.

Among other so-called soft commodities traded in London, robusta for July delivery, the most actively traded contract, rose $30, or 1.3 percent, to $2,364 a metric ton as of 10:34 a.m. local time on the Liffe exchange. The contract is up for a third consecutive trading session this week.

Cocoa for July delivery gained 10 pounds, or 0.7 percent, to 1,472 pounds ($2,911)) a ton.

To contact the reporter on this story: Danielle Rossingh in London at drossingh@bloomberg.net

Last Updated: April 17, 2008 06:56 EDT