Sugar tumbled in New York following a decline of crude oil that raised speculation that demand for alternative fuels such as ethanol made from sugar cane would fall.

Crude oil futures in New York declined by 2 percent after U.S. inventories gained.

Sugar futures for July delivery declined by 0.3 percent or 0.04 cents to 11.83 cents a pound on ICE Futures U.S. the former New York Board of Trade.

Sugar production from mills was forecast to increase as much as 12 percent to around 33.9 million and 35.2 million tons.

Sugar futures have declined by 22 percent.

According to the Sugar and Ethanol Industry Association, sugar mills in Brazil, the world's largest producer of the sweetener, will increase the amount of the crop used to produce ethanol to 58 percent this year due to high energy prices.

The Brazil Agriculture Ministry said that Brazil sugar and ethanol mills will crush as much as 579.8 million tons of cane in the April to November season, higher than 475.1 million tons last year.

Crude oil