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SOFTS-Sugar prices slide, awaits revival in demand

11 March 2010 (Reuters) By Nigel Hunt and David Brough

Raw sugar futures fell on Thursday as the market waited for clear signs of renewed demand from physical buyers after the sharp slide in prices during the last few days.

Cocoa futures also eased, weighed by favourable mid-crop prospects in West Africa while coffee was little changed.

ICE May raw sugar futures fell 2.6 percent or 0.52 cent to 19.17 cents a lb by 1308 GMT. Prices tumbled to a seven-month low for the benchmark front month of 18.82 cents a lb on Wednesday.

"It has been obvious that the lack of meaningful offtake has sent negative signals to the fund and speculative community. The true price of a commodity is that which the final end user is willing to pay," brokers Sucden UK said in a report on Thursday.

Tunisia bought white sugar at a tender for 14,000 to 18,000 tonnes held on Wednesday but Egypt's state-owned Sugar and Integrated Industries Company cancelled a tender to buy 300,000 tonnes due to volatile prices.

"The sell-off has probably gone too far, physical demand has held off but maybe it (physical demand) will start coming back again," said VM Group analyst Gary Mead.

London May white sugar was off $7.20 or 1.3 percent at $529.90 per tonne.

COCOA CONSOLIDATION

Cocoa futures were slightly down with the market looking to rebuild after a steep decline during the last couple of months driven partly by improving crop prospects in West Africa.

May cocoa on ICE stood $4 or 0.1 percent lower at $2,840 a tonne, far below its contract high of $3,514 set in December 2009.

"I think we should see a period of consolidation," said VM Group analyst Gary Mead.

The outlook for mid-crops in both Ivory Coast and Ghana has, however, improved in recent weeks with the region largely spared harmattan, dry desert winds which can damage crops.

"I think the weather has been pretty favourable (for crops)," Mead of VM Group said.

May cocoa on Liffe fell 15 pounds or 0.7 percent o 2,191 pounds a tonne.

Coffee futures were little changed in quiet conditions.

May arabica futures on ICE edged up 0.35 cent or 0.3 percent to $1.3310 per lb while May robustas on Liffe eased $3 or 0.2 percent to $1,230 a tonne.

Coffee exports from El Salvador rose 17.6 percent in February to 191,252 60-kg bags, the national coffee council said on Wednesday.

Prices as of 1305 GMT Product Last Change Percent Move End 2009 Ytd Percent ICE sugar 19.27 -0.42 -2.13 26.95 -28.50 ICE coffee 132.90 0.15 +0.11 137.60 -3.42 ICE cocoa 2848.00 4.00 +0.14 3310.00 -13.96 Liffe sugar 531.50 -5.60 -1.04 710.20 -25.16 Liffe coffee 1231.00 -2.00 -0.16 1332.00 -7.58 Liffe cocoa 2195.00 -11.00 -0.50 2271.00 -3.35 CRB index 274.20 -0.42 -0.15 283.38 -3.24 Crude oil 82.02 -0.07 -0.09 79.36 3.35 Euro/dlr 1.37 0.01 +0.42 1.43 -4.60 * ICE sugar and ICE coffee in cents per lb, ICE cocoa, Liffe sugar and Liffe coffee in dollars per tonne. Liffe cocoa in pounds per tonne (Editing by James Jukwey)

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