By Peter Blackburn
LONDON, Dec 18 (Reuters) - Concern about the 1997/98 Cuban sugarcane crop triggered a burst of trade buying after raw sugar futures tumbled this week when chart-driven commodity funds baled out, traders said.
They said a leading French trade house dived into the market after prices fell after Cubazucar apparently gave it a lower than expected sugar allocation.
Some traders believed the Cuban crop could fall to as low as 3.2 million tonnes. Cuban Economy Minister Jose Luis Rodriguez has said it would fall below four million tonnes, from 4.25 million last season and eight million in the 1970s.
"The trade house believed it had to get in there first," said a British-based trader.
Among raw trades believed to have been concluded in the past 24-hours are two cargoes of Cubans for Feb/March delivery at 20 points over New York March futures, as well as a cost and freight Black Sea cargo for February loading at between $28 and $30.
Some 45,000 tonnes of Salvadors for first quarter 1998 delivery are also said to have been traded at two points over New York March futures.
A cargo of Brazils for March/May 15 delivery is believed to have been traded at 25 points over.
Some 22,000 tonnes of east coast Mexicans is believed to have traded at 10 points over for February shipment.
The shake-up of Cuba's crisis-stricken sugar industry, including a new sugar minister and president of Cubazucar, has created an air of uncertainty.
"There's a lot of rumour and counter-rumour," said a trader.
Cubazucar normally allocates sugar supplies to trade houses in October but this year has delayed until it has a clearer picture of the crop.
"It's tidying up its act. It doesn't want to give money away due to claims for failure to meet commitments," said the trader.
In its latest monthly report, Czarnikow Sugar noted that Cuba will no longer try to maximise production by cutting immature cane and instead will boost plantings.
"By rebuilding a stock of cane suitable for harvest at the required time, it is hoped to lay the groundwork for a gradual recovery," Czarnikow said.
Signalling a change of direction, President Castro also last weekend stressed the need to make the sugar industry more cost conscious.
17:14 12-18-97