UPDATE 2-Noble denies seeking to sell agribusiness

* Noble says no plans to sell agribusiness

* Consolidation under way in global grain trading

(Adds response from Noble)

LONDON/SINGAPORE, Oct 31 (Reuters) - Singapore-listed commodities firm Noble Group Ltd denied it wanted to sell its agribusiness unit, after industry sources said it was looking for a buyer as an alternative to plans for a separate share listing.

Noble, which also has businesses focused on metals and energy, gave no immediate response, but later said it was not looking to sell the unit.

``We have not, even for one minute, contemplated selling our Ags business,'' chief executive Yusuf Alireza said in an email responding to an earlier Reuters article.

The firm had planned to list its agribusiness in a Singapore IPO, but difficult market conditions led the company to explore other options, sources said.

Noble announced in October last year that it planned to list its agribusiness in a deal which sources said could have raised $700 million.

JPMorgan, Citigroup and Goldman Sachs were hired for the deal.

A source with knowledge of the process told Reuters an IPO of the agribusiness in current market conditions would be ``very difficult''.

Noble's agriculture division's operating income fell to $51.1 million in the April to June quarter, down around 69 percent from the same period a year earlier, with the firm noting grains and oilseeds experienced a challenging quarter with poor crushing conditions in China.

Noble is one of Asia's so-called NOW commodity traders, along with Olam International Ltd and Wilmar International Ltd, challenging the ABCD majors - Archer Daniels Midland, Bunge, Cargill and (Louis) Dreyfus - which dominate grain flows.

A consolidation is under way in global grain trading as the major players position themselves for an expected surge in demand for food commodities, particularly in Asia.

Archer Daniels Midland this month bid for Australia's last independent grain handler, GrainCorp, in the latest in a series of moves by grain trading heavyweights to grab a larger slice of a booming market.

Noble, founded in 1987 in Hong Kong, first ventured into agricultural commodities with its cocoa operations which were introduced in 1998.

Its agribusiness now operates across markets including oilseeds and grains, palm oil, cotton, coffee, sugar and cocoa with assets including at least three oilseed processing facilities in China and four sugar mills in Brazil.

(Reporting by Sarah McFarlane in London, Saeed Azhar, Naveen Thukral and Eveline Danubrata in Singapore; editing by Jason Neely)