But in its latest monthly report, Man said on Tuesday that the market is expected to continue to suffer from surpluses accumulated from the past four seasons.

The downwards revision may stop prices sliding further but would not prompt a sustained rally, it said. "...The market continues to be overwhelmed by lack of offtake and declining purchasing power," Man said in the report.

Worsening economic growth prospects in an increasingly interdependent global economy depressed sugar markets. "This has brought with it increasing currency volatility and declining purchasing power in many of the so-called emerging markets," Man said.

In India, excessive rains in the run-up to harvesting reduced sugar content and the crop has been scaled back to 15.2 million tonnes, whites value,from an earlier 16 million.

A cold, damp end to the European Union campaign has led to are duction of around 200,000 tonnes in forecast output to about 16.1 million tonnes, whites value, since end-October.

The beet harvest in the Netherlands and Belgium has been the worst affected with production expected to fall below the EU quota in both countries.

Shortage of beet has driven some Dutch factories to seek supplies from North West Germany.

Despite poor sugar content and heavy rain causing delays in Germany, the local sugar association expects deliveries to exceed last year's level.

In Australia, Man said the output forecast will be have to be lowered substantially from its 5.45 million tonnes, raws value, October forecast which was already sharply lower than the 5.91 million tonnes produced in 1997/98.