SOFTS-Sugar falls on India import comment, coffee steady

* Sugar futures fall on Indian minister's comments

* Cocoa eases in overbought conditions

(Writes through with U.S. comment and closing prices for ICE markets, adds byline, dateline)

NEW YORK/LONDON, March 25 - Sugar futures fell on Wednesday, pressured by India Farm Minister Sharad Pawar's comments that India may not need white sugar imports at zero duty as local prices had fallen.

Coffee prices were little changed, pressured by the weak commodity complex, while ICE cocoa eased back slightly as both markets sought to consolidate after rising sharply during last couple of weeks.

Sugar futures headed swiftly lower after the minister's comments in an interview with Reuters.

European traders interpreted Pawar's comments as bearish, as they signaled that India would not need to buy as much sugar on the international market as previously anticipated.

Traders bought white sugar futures earlier this month on expectations the Indian government might scrap the 60 percent import duty on white sugar. India is the world's biggest sugar consumer and the second biggest producer of the sweetener after Brazil.

"It's no surprise the market is lower," said Nick Hungate, a soft commodities trader with Rabobank in London, referring to the Reuters report.

Some traders said privately it was in the interests of Indian government authorities to talk down the sugar price before the April-May general election, as sugar is a key staple and a hot political issue in India.

Benchmark ICE May raw sugar futures fell 0.18 cent to close at 12.82 cents per lb, while London May white sugar settled $4.10 down at $393.90 per tonne.

Morgan Stanley said on Wednesday it had raised its estimate for the world sugar deficit in 2008/09 to 7.9 million tonnes from a previous projection of a deficit of 1.8 million tonnes.

The increased deficit forecast mainly reflected a drop in production in India, Morgan Stanley said in a report, adding the deficit should ease to about 0.8 million tonnes in 2009/10 as farmers respond to higher prices.

COCOA OVERPRICED

Cocoa futures on ICE were lower, with the market viewed as overbought, while prices in London were supported by the weakness of sterling.

"It's competing forces, potential Ghana sales and poor consumption on the negative side, and on the positive side a bit more interest from commodity funds and speculative elements," one New York-based cocoa trader said.

May cocoa in London ended 1 pound lower at 1,920 pounds a tonne. The contract had traded as low as 1,656 pounds about a month ago.

May cocoa on ICE settled $23 lower at $2,586 a tonne.

Coffee prices were marginally down with the run-up in prices showing signs of stalling, dealers said.

May arabicas on ICE were off 0.05 cent to close at $1.1670 per lb, still far above a contract low of $1.0435 set on March 9. May robustas in London ended $7 lower at $1,569 a tonne.