SOFTS-Liffe cocoa edges above 11-month low, sugar firm
* Cocoa dealers await Ghana budget details
* Global sugar market remains over supplied
* Dry weather in Vietnam coffee regions monitored
(Adds details, quotes, updates prices)
LONDON, March 5 (Reuters) - Liffe cocoa futures edged off an eleven-month low hit in early trading on Tuesday, as improving mid-crop prospects in West Africa weighed, while raw sugar and arabica coffee were firm.
May cocoa on Liffe rose 8 pounds or 0.6 percent to 1,396 pounds a tonne at 1125 GMT, having earlier touched an 11-month low of 1,384 pounds, as improving weather conditions in West Africa aided the development of the mid crop.
"The cocoa market has been suffering from weak demand in Europe and a recovery of the supply situation, but the market supply and demand picture right now looks fairly balanced," said Tobias Merath, global head of commodity research at Credit Suisse.
"That would indicate this market is closer to a bottom. At current levels we would argue cocoa is trading a bit below fair value."
A second straight week of abundant showers and sunshine across Ivory Coast's principal cocoa regions is improving growing conditions ahead of the April-to-September mid-crop harvest, farmers and analysts said on Monday.
Last week the International Cocoa Organization forecast a small global cocoa deficit of 45,000 tonnes for the 2012/13 season.
May cocoa futures on ICE were up $23 or 1.1 percent at $2,079 per tonne, after dipping to $2,053 per tonne on Monday, the lowest level since June 2012.
Dealers awaited detail on the world's no 2 grower Ghana's budget for any indication that the local currency could be devalued.
Ghana's 2013 budget aims to trim the fiscal deficit to 9 percent, from just over 12 percent in 2012, by enhancing tax revenues and controlling expenditures, a source with knowledge of the document said on Tuesday.
"All eyes are on the forthcoming vote of the budget and whether or not they will devalue the Cedi which looks unavoidable in the current context," said Eric Sivry, head of agri options brokerage at Marex Spectron, referring to Ghana's lagging forward sales.
SUGAR NUDGES HIGHER
May raw sugar futures rose 0.10 cent, or 0.6 percent to 18.18 cents per lb. The front-month contract dipped to 17.61 cents a lb on Thursday, the lowest level since August 2010.
Expectations that Brazil will reduce or remove taxes on fuel ethanol helped support prices, as the changes should improve profit margins for mills, dealers said.
In a move intended to help Brazil's struggling cane industry, the government plans to exempt fuel ethanol from certain taxes that should be equivalent to between 2 percent and 3 percent of the current pump price, two government sources said on Monday.
"The sugar market is still over supplied, there's not a whole lot of reasons to see it a lot higher although there's a floor at one point where the conversion to ethanol kicks in," said Credit Suisse's Merath.
"We would look at 17 cents as the next target."
May white sugar on Liffe was up $1.30 or 0.3 percent to $516.90 a tonne.
In coffee, ICE May arabica coffee edged up 0.15 cent or 0.1 percent to $1.4680 per lb, above a 32-month low of $1.3760 hit on Feb. 19.
Dealers said anticipation of another large crop from Brazil in the coming months limited potential upside.
"Brazil is set to achieve a coffee harvest that is expected to be record-high for a low-yield year - this is also likely to continue to weigh on prices in the medium term," said Commerzbank in a commodities note.
Brazil's arabica coffee crop follows a biennial cycle but the gap between on and off year crops has been narrowing.
May robusta coffee futures on Liffe edged $2 or 0.1 percent higher, to $2,124 a tonne, supported by dry weather concerns in top grower Vietnam.
"Weather forecasts do not suggest any improvement in the situation until April," said Commerzbank.
"That said, it remains to be seen whether the 20-25 percent collapse in the harvest feared by growers will actually materialize."
(Reporting by Sarah McFarlane; Editing by Alison Birrane)