Coffee eases on bearish indicators, cocoa edges up

* Coffee underpinned by tight supply outlook
* Liffe Cocoa weight by increasing the pound against the dollar
* Sugar market expected announcement of possible export of India
(Updates with quotes, data, updates prices)
By David Brough
LONDON, March 22 (Reuters) - Coffee prices fell on Tuesday, with Arabic back over a 34-year high earlier this month, weighed down by bearish technical indicators.
Cocoa prices rose, boosted by a surge in demand for the industry after a recent setback in prices, while sugar futures were mostly stable.
May arabica coffee in the cross ICE 0.80 cents or 0.3 percent at $ 2.7620 per pound at 1127 GMT, while July fell 1.15 cents to $ 2.78.
New York, coffee is expected to fall $ 2.64 per pound in terms of its wave pattern and an analysis of the Fibonacci ratio, a market analyst at Reuters, said Wang Tao.
Traders said that a point of view the limited supply and continued low global stocks, however, to prop up the coffee market.
"Robusta are the best balance and most likely in deficit," said James Hearn, joint head of agriculture in Marex Financial Ltd.
"The Vietnamese are largely front-loading their crops and have sold record amounts against the position in May."
Last week, the contract premium in London in May was significantly expanded in July, traders said a large trade house is believed to be the principal holder of foreign exchange reserves and intend to expand their holdings.
"A great player has come to take the coffee out of the position in May in anticipation of the busy second half of the year and reached the unequal trade and hedge forward sales to consumers have little structure," said Hearn .
This led to short covering of anyone who wanted to close positions to avoid coffee delivery against the May contract or rolling positions forward.
LIFFE robusta for May fell $ 33, or 1.3 percent to $ 2,580 a tonne. The contract had fixed a maximum of three years for the second month of 2,672 dollars per tonne, as the premium in July soared last week.
May-July premium was holding around $ 140 after peaking at more than $ 200 on March 17.
STERLING STRENGTH
Cocoa futures were higher on buying in the industry, despite the strength of the pound LIFFE limited gains. The pound rose to a maximum of 14 months against the dollar on Tuesday.
May cocoa on ICE rose $ 40 to $ 3,229 a tonne, while the LIFFE cocoa in May increased 18 pounds to 2068 pounds ($ 3,388).
ICE cocoa prices have cut about 15 percent of its value since reaching a maximum of 34 years earlier this month.
"The market has given back a lot of land ... is beginning to attract some interest from industry under the market," said a London-based agent.
Dealers continued to closely monitor the conflict in top producer Ivory Coast.
Thousands of young supporters of Ivory Coast Laurent Gbagbo responded to a call to join the army on Monday, while Liberian President Ellen Johnson-Sirleaf has warned that the crisis risked destabilizing the West African region.
Sugar futures were flat Tuesday as the market digested a report citing industry sources saying that India is likely to allow 200,000 tonnes of sugar exports without restrictions on sales, down from 500,000 tonnes previously permitted.
Some traders expressed skepticism that the announcement would take place because the market has been on edge for months to get news of a permit "open general license" exports, but has not been received so far.
"The market is not reacting to the news. The Indians (millers) the need to sell the sugar because they have a big surplus, "said a senior trader in London.
Traders said that if India will approve the export of 200,000 tonnes of sugar OGL late Tuesday that could open the door for exports later in the year of a projected surplus of about 1.5 million tonnes.
ICE May raw sugar rose 0.03 cent to 27.51 cents per pound, down from a February 2 30 years of 36.08 cents, in a context of low global stocks.
London white sugar for May rose $ 1.20 or 0.2 percent to $ 707.50 per ton.
Traders said that nominations for ships against a delivery of almost 1 million tonnes of sugar against the March expiration ICE had developed at a moderate pace, indicating the widespread availability of supplies.
They also noted that Thailand was undercutting sugar Brazilians in key markets such as Thailand has more sugar for the crop that was expected.
Traders said they expected significant tonnage to enter the world market for the coming harvest in the south-central Brazil, the largest producer and exporter.