* Brazil in no rush to sell coffee as prices surge
* Ouattara seeks extension of Ivory Coast cocoa export ban
* Sugar boosted by prospect of European Union imports
NEW YORK/LONDON, Feb 22 (Reuters) - U.S. cocoa futures rose on Tuesday, closing at the highest level in 32 years on further turmoil in top grower Ivory Coast, while arabica coffee futures slipped from the highest levels in more than three decades.
Sugar settled lower, giving back early gains.
Cocoa futures have been rising as the crisis in Ivory Coast has led to a virtual halt to exports. Presidential claimant Alassane Ouattara extended the export ban to March 10.
"That obviously tightens supply in the market," said Sterling Smith, analyst with Country Hedging in Minnesota.
Cocoa arrivals at ports in top grower Ivory Coast slowed to 5,000 tonnes last week and exporters expected them to seize up completely as bank closures leave them with no liquidity to pay
farmers.
"The situation is not getting any better," said Kona Haque, commodity strategist at Macquarie Bank. "I think the risks are rising for short-term supply disruptions."
May cocoa futures on ICE <CCc2> soared $87 or 2.5 percent to finish at $3,586 per tonne, the highest close for the second position since February 1979. The session high reached $3,608.
The May premium to July <CCN1> closed at a steep $64, from $47 in the last session.
Prices on Liffe also advanced with May <LCCc2> closing up 52 pounds or 2.3 percent at 2,338 pounds a tonne after hitting 2,355 pounds, the highest level for the second month since July 2010.
Coffee prices, which have doubled since June 2010, rose to the highest levels in more than 30 years before the buying exhausted itself on a lack of follow-through and as day traders got out of the market, dealers said.
The rise has been driven by three consecutive below-par crops in Colombia, the top producer of high quality washed arabica beans, while the world's number one coffee grower Brazil is heading into the off-year in its biennial crop cycle.
May arabica futures <KCc2> rose 1.35 cents to finish at $2.7435 per lb, the highest settlement for the second position since May 1997. The contract hit an intraday peak at $2.7840, the highest for the second position in more than 30 years, in light volume as market participants focused on the larger metal and energy markets.
GLOBAL COFFEE DEFICIT
"Buyers are desperately looking for available supplies," F.O. Licht analyst Stefan Uhlenbrock, noting a Brazil off-year alone was enough to cause a deficit in the global coffee market.
Dealers said the next major upside target was $3.00 per lb.
"There is every possibility that prices will reach that level ($3.00). We are far away from solving the overall supply uncertainties," Uhlenbrock said.
Brazil is holding back its big bean stocks and hoping for improved market conditions in a wager that world prices will keep on rising, its top coffee official said last week.
"Physical (coffee) prices are still very strong, and Brazil is in no rush to sell," Haque said. "A good chunk of the farmers are pretty much sold out anyway."
Robusta coffee futures on Liffe also rose with May <LRCc2> peaking at $2,417 a tonne, the highest level for the second month since March 2008. The contract closed down $5 at $2,382 a tonne.
The premium of arabica over robusta was around $1.67, the highest level in more than two years.
Raw sugar reversed lower, initially boosted by the prospect of increased imports into the European Union and strength from the rallying crude oil market. Late-day weakness came from spillover pressure from the grains trading on the Chicago Board of Trade, on worries about unrest in Libya, while the commodity complex <.CRB> pared its gains.
A European Union committee will vote on Thursday on whether to open a new import quota for sugar at reduced duties, to ease a supply shortage on the EU market, the European Commission
said on Monday. [ID:nLDE71K1II]
The most-active ICE May raw sugar contract <SBK1> inched down 0.04 cent to finish at 28.38 cents per lb while May whites on Liffe <LSUc1> fell $5.50 to close at $719 per tonne.
Source: ((marcy.nicholson@thomsonreuters.com; +1 646 223 6043; Reuters Messaging: marcy.nicholson.reuters.com@reuters.net))
