China's state-owned food company COFCO raised its takeover price for Australian sugar maker Tully Sugar to A$43 a share from A$41, moving the company's total value to A$132.9 million, Tully Sugar's chairman Ralph Craven said in a letter to shareholders.

Other bidding contenders include US giant Bunge, who unconditionally upped its offer to A$43 a share, and Mackay Sugar, who offered A$41 a share.

The bidding is the latest attempt of COFCO to expand its sugar business abroad. The move is considered strategic in terms of food manufacturing capability.

COFCO's sugar business currently ranks 15th in China. Its subsidiary COFCO Tunhe, the largest sugar company in China, has an annual output of 450,000 tons and has cooperation with Coca Cola and Kraft Foods.

COFCO's bid is the latest example of Chinese companies showing an interest in the Australian agricultural and food sector. Bright Food of China made a A$1.68 billion bid for a spin-off of Australian conglomerate CSR, but the deal collapsed in January 2010.