London benchmark May white sugar futures settled down two percent, or $5.5, at $270.0 a tonne on arbitrage sales against the New York raw sugar futures market, traders said. "It is arbitrage selling against New York," one European trader said. August ended down $3.8 at $267.7 in volume of 1,114 lots, having traded from $266.6 to $272.5.

In its February sugar report, merchant Czarnikow, citing an improvement in the production outlook, marginally revised down its projected global 2004/05 sugar deficit to 4.47 million tonnes, from its previous forecast deficit of 4.78 million.

"The statistical balance continues to drive a constructive market view led by changes in Asia," Czarnikow said, referring to supply tightness in Asia.

Pakistani importers had booked around 315,000 tonnes of sugar after a duty cut earlier this month and orders for another 100,000 tonnes are expected in the coming days, an official said on Wednesday.

Copyright Reuters, 2005