SOFTS-Cocoa strengthens, eyes on NY sugar dinner

* Fortis sees higher arabica coffee output

* Ivory Coast cocoa arrivals at 931,855 T by April 19

LONDON,- Cocoa and sugar futures consolidated on Wednesday, with cocoa traders digesting Fortis's narrowing of the 2009/10 global deficit, and some traders visiting New York for a sugar conference and industry dinner.

Coffee futures were little changed in thin volumes on routine two-day investor dealings and rollover business.

In cocoa, dealers noted a downward revision by Fortis of its estimate for a projected global cocoa deficit in 2009/10 to 64,000 tonnes from a previous forecast for a deficit of 101,000 tonnes.

The investment bank also revised its outlook for 2008/09 to a balanced market from a previous forecast of a deficit of 39,000 tonnes issued a month ago.

Cocoa dealers said the revised figures were broadly in line with the market consensus, and saw no immediate market impact.

"Should I pretend that I am shocked?" one dealer said.

"Grindings figures for Q1 were quite sharply down, so a lot of these forecasts are going to have to play catch-up."

Dealers said a firmer pound kept the lid on London cocoa futures.

Sterling reversed course to hit session highs against the dollar and euro on Wednesday after stronger-than-forecast UK service sector data eclipsed earlier concerns about U.S. banks and boosted investor risk appetite.

London July cocoa futures fell 8 pounds to 1,665 pounds per tonne in modest volume of 2,812 lots at 1209 GMT, while ICE July cocoa was down $29 to $2,348 per tonne.

Cocoa arrivals at ports in top grower Ivory Coast reached 931,855 tonnes by April 19, down from 1,076,350 tonnes in the same period a year ago, according to data from the Coffee and Cocoa Bourse (BCC) obtained by Reuters.

SUGAR DINNER
Sugar futures consolidated just below Tuesday's 2-3/4-year high, against the backdrop of strong demand from India, and some traders were away from their desks to attend the New York sugar dinner, an important opportunity to meet clients.

A European broker said in a daily report that attendance at the New York sugar industry cocktail parties seemed subdued this year, possibly due to the new H1N1 flu scare.

"The first impressions we have are that there is little market consensus as to whether to be bullish or bearish," the broker said.

"The conversations, unsurprisingly, are mostly about India. Most traders seem to expect India to buy 'at least' one million tonnes of whites over the next six months, if not more."

India, the world's biggest sugar consumer, has swung to a net importer from exporter this year.

India has exempted sugar mills from an obligation to sell 10 percent of their output processed from imported raws at low prices, a government notification showed on Wednesday.

ICE July raw sugar futures were flat at 15.15 cents per lb at 1211 GMT, while London August white sugar was down $2.00 to $445.00 per tonne in thin volume of 1,815 lots.

Coffee futures also consolidated on light two-way investor dealings pressured by a firmer dollar, as the market digested a report from Fortis forecasting global arabica coffee output would climb in 2009/10 to 89.36 million 60-kg bags from 79.82 million in 2008/09.

The investment bank, in a monthly report, also forecast global robusta coffee production would fall in 2009/10 to 51.94 million bags from 54.34 million in 2008/09.

ICE July arabica coffee futures dipped 0.3 cent to $1.2435 per lb, while London July robusta coffee futures were up $1 to $1,516 per tonne in light turnover of 1,107 lots.

source: reuters