SOFTS-Liffe sugar rises, surplus supplies cap gains
* Record net shorts in ICE sugar, coffee
* West Africa cocoa mid-crops could be record size
(Adds details, quotes, updates prices)
LONDON, Feb 18 (Reuters) - Liffe white sugar futures were firmer on Monday, trading above last month's 32-month low, with ample supplies limiting price upside potential.
Liffe robusta coffee and cocoa futures were little changed in subdued trading with U.S. ICE agricultural markets shut for the Presidents' Day holiday.
May white sugar futures on Liffe traded up $6.00 or 1.2 percent at $496.30 a tonne at 1344 GMT.
"With New York closed today, we don't expect much out of the London market," said Nick Penney of brokerage Sucden Financial.
Penney added that it will be interesting to see how values in New York react when markets re-open Tuesday, after the latest Commitment of Traders report showed an increase in the raw sugar speculative short position.
Speculators raised their net short positions in raw sugar and coffee contracts on ICE Futures U.S. to record highs in the week to Feb. 12, increasing their bearish stance in markets abundant in supplies, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
Dealers said the large short positions made sugar and arabica coffee vulnerable to short covering rallies.
An expected third consecutive global sugar surplus has kept sugar markets on the defensive thus far this year.
White sugar futures have fallen by around 5 percent since the start of the year, holding up better than raw sugar, which has fallen by over 8 percent over the same period, dipping to a 2-1/2-year low last week.
On Monday, India's Farm Minister Sharad Pawar said his ministry favours a proposal to raise the production tax on sugar sector, if mills were freed from an obligation to sell the sweetener at lower prices for public distribution.
"These reforms would give mills more say in the sale of their sugar, both in the internal market and exports," said Sucden's Penney.
Robusta coffee futures were little changed, as dealers anticipated activity on the physical market would pick up, with business resuming Monday following the Lunar New Year holiday in top producer Vietnam.
May robusta coffee futures on Liffe edged up $4, or 0.2 percent, to $2,061 per tonne.
Robusta and arabica prices have been diverging, with robusta rising over 7 percent since the start of the year, supported by strong demand, while arabica prices have fallen over 5 percent.
"The reason you've got such strong demand for robusta is because it's cheap relative to arabica," said a European analyst.
Speculators increased a net long position in robusta coffee futures and options on NYSE Liffe in the week to Feb. 12, exchange data showed on Monday.
In cocoa, dealers said West Africa's mid crop development was benefiting from favourable weather, which was weighing on the market as well as anticipated forward sales.
"Record mid crops are a distinct possibility but it has been a bit dry recently so we won't know until the second half of March," said the European analyst.
May cocoa on Liffe eased 2 pounds or 0.2 percent to 1,415 pounds a tonne.
(Additional reporting by David Brough; Editing by Alison Birrane)