For full article: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/04/cccomms104.xml Fears of a commodity crash are growing as speculation continues to outstrip demand. Ambrose Evans-Pritchard reports India faces a mountain of surplus sugar. Over 20m tonnes sit in warehouses, begging for buyers. Brazil has ramped up cane production in a burst of expansion. It is now exporting record amounts of sugar, even after diverting half its harvest into ethanol for cars. By any definition, there is a global glut. Yet this has not stopped sugar futures jumping 40pc since December, reaching $14.18 (Â£7.15) a pound on the March 2008 contract. Sugar has been swept up with the whole gamut of commodities - grains, metals, oil and gas - in a fevered surge of investment in futures contracts, regardless of the real demand from daily users. Wheat has risen 112pc in four months. Judy Ganes-Chase, a commodity expert at J Gaines Consulting, said the market had become unhinged. "Investors have made far too much of the link between sugar and biofuels. We've had one massive surplus after another, yet people still keep planting more cane. Brazil is the only country where ethanol is actually viable in cars. Everywhere else is building up sugar stocks in mere hope," she said. The sugar syndrome is the starkest evidence to date that the raw materials boom is getting ahead of itself. A variant of the pattern is emerging in industrial metals, crowned by an explosive "short squeeze" in copper last month. Arguably, even crude oil futures have decoupled from the real market.