SOFTS-Coffee and cocoa reel, but sugar losses peeled

* Cocoa and coffee hit by liquidation, deleveraging

* Sugar mixed, but tight supplies and offtake trim losses (Recasts with U.S. comments, prices; adds NY dateline/byline)

NEW YORK/LONDON, - A wave of investor liquidation and deleveraging deflated coffee and cocoa prices Tuesday, but losses in sugar were reined in by tight supplies and news India will be a major importer of the sweetener this year.

Analysts said the weakness was caused by investors taking cash off the table after recent rallies to multi-month peaks, persistently jangled nerves over the weak global economy and whether a U.S. plan to lift the gloom will work at all.

"Some of the interest we've seen the past few days has succumbed to general economic concerns," said Steve Platt, an analyst for Archer Financial Services in Chicago.

"People are just quick to take their money and run. People would need to see more proof the stimulus plan is working," he declared as the U.S. Senate approved its version of a stimulus plan to help the wounded U.S. economy.

Cocoa posted sharp losses in fairly brisk volume, with deleveraging seen as stock markets tumbled.

"Support for further gains for the time being seems to be limited, with heavy profit-taking entering both (New York and London cocoa) markets as soon as a failure to the upside occurs," analysts from Sucden said in a note.

The longer-term fundamentals of cocoa, though, are bullish, given the supply problems in major African growers, led by top producer Ivory Coast.

New York's May cocoa futures dove $120, or 4.2 percent, to finish at $2,707 per tonne, having hit a 5-month peak just last week.

London's May cocoa contract slid 47 pounds, or 2.4 percent, to end at 1,892 pounds per tonne.

Coffee futures also suffered from the weakness that seeped into the market as deleveraging hit futures. But analysts caution that a looming supply crunch should buoy coffee values in the long term.

New York's March arabica contract tumbled 4.55 cents, or 3.7 percent, to close at $1.1685 per lb, while London's May robusta futures lost $46, or 2.7 percent, to end at $1,622 per tonne.

SUGAR MIXED AS LOSSES LIMITED

Sugar futures were mixed as any losses were pruned quickly by the overall bullish fundamentals in the market.

Analyst Kingsman said "there does seem to be some confidence that there is more room for a leisurely cruise to the upside over the next few months as stocks diminish."

This was underscored by Kingsman forecasting a global sugar deficit of 9.66 million tonnes in 2008/09 because of a larger than expected fall in production by No. 2 producer India.

A supply deficit will combine with sizable imports by India in boosting raw and white sugar values.

India is expected to import about 4.5 million tonnes of raw sugar in the next 12 months, a leading Indian industry official told Reuters in New Delhi.

New York's March raw sugar contract dipped 0.05 cent to settle at 13.23 cents per lb. But the London March white sugar contract gained $2.60 to close at $395.80 per tonne.
source:alibaba