Analysts at Citi believe raw sugar prices at ICE exchange are going to stay elevated for a longer period, possibly testing fresh highs, mainly due to expected production difficulties in Asia and the possible ban on exports from India.

In a monthly report about the soft commodities market, Citi said New York cocoa prices have peaked or are about to peak, and would fall towards the end of the year to a range between $3,100-$3,200 per metric ton.

On sugar, Citi upgraded its price target by 1 cent for the last quarter to 25.50 cents per pound, while also increasing targets for next year.

The bank said it expects money managers to increase positioning in raw sugar futures on ICE in coming weeks and see the possibility of prices testing higher levels around 27-30 cents in the last quarter of the year.

"While a sizable 2023/24 global deficit is already priced in with sugar trading at close to decade highs, price risks still look skewed towards the upside as El Nino has already led to erratic weather patterns across key sugar producing regions in Asia," it said in the report.

"Both India and Thailand have experienced lower-than-normal rainfall recently, which could translate into further crop downgrades for the upcoming 2023/24 crop year," the bank added.

On cocoa, Citi said the commodity is sensitive to high prices and more negative data on grinding in coming months could prompt liquidation of part of the speculators' long position.

The bank said arabica coffee is heading to a global supply surplus next year, which should keep prices far from the peaks.

Citi reduced its three-month arabica coffee price target by $0.20 per pound to $1.55/lb and cut the 6-12 month target by $0.10/lb to $1.50/lb. (Reporting by Marcelo Teixeira; Editing by Lincoln Feast.)