* Coffee differentials firm, farmers reluctant to sell

* Rising sugar supply from Thailand, India weigh on premiums

* Rubber cautious on worries about China

By Lewa Pardomuan

SINGAPORE, April 2 (Reuters) - Coffee differentials are likely to stay firm this week as farmers and exporters turned cautious following gyrations in London futures, while sugar premiums could fall on rising supply in Asia, dealers said on Monday.

Vietnamese robusta could be sold at a smaller discount to London's July contract because of slow offers from farmers and exporters, having been quoted at as much as $40 a tonne below London futures last week.

"Our survey shows that less than 300,000 tons is now held by the farmers -- not far from their average holdings in past years at this period of the year and at this stage of the crop," said Herve Touraine, a dealer at SW Commodities, a unit of Hong Kong-based conglomerate Sun Wah Group.

"Very few sales have been made on the forward positions. We are just starting some deals with the second quarter. The third and fourth quarter are neglected."

Vietnam's Central Highlands coffee belt has entered the peak of the six-month dry season, when farmers usually need to step up watering for the next crop cycle. A sizeable amount of coffee from the previous crop is still in the hands of farmers and exporters, dealers said.

Benchmark Liffe May robusta coffee futures ended down $15 at $2,026 a tonne on Friday, despite gains in arabica futures. The contract has fallen more than 3 percent since hitting a 6-month low in early March.

Indonesian coffee beans were expected to be offered at high premiums of more than $100 a tonne due to the slow progress of the current harvest in the world's second-largest producer after Vietnam.

SUGAR PREMIUMS HARDLY CHANGED

In sugar, early indications showed that premiums for Thai high-polarisation, or hi-pol, raw sugar were hardly changed, at 40 to 45 points to New York's May contract, but the value could slip later this week on more supply from Thailand and India.

A government source said last week that India, the world's largest consumer, had allowed another 1 million tonnes of unrestricted white sugar exports, taking to 3 million tonnes the total approved so far.

"Indian officials have changed domestic quota allocations for mills to a quarterly rather than a monthly basis, and seem set to allow a further 1 million tonnes of exports on a first-come, first-served basis," said Tom McNeill, director of Green Pool, a commodities analyst based in Brisbane.

"The changed export arrangements may be fiercely resisted by those mills disadvantaged, but it may be early signs the government wants to interfere less in the industry."

India, which may see a surplus of 4 million tonnes in the current crop year, has allowed millers to sell 4.5 million tonnes of sugar from April to June in the open market, up 6 percent from the previous quarter, to meet increased summer demand.

Thailand, the world's second-largest sugar exporter after Brazil, is forecast to produce a record 9.9 million tonnes of sugar in the current 2011/12 crop and export 7.5 million in 2012.

RUBBER, SUGAR

A few cargoes of Indonesian tyre grade changed hands at $3.76 a kg late last week, but China's absence caused anxiety among sellers in Southeast Asia.

Despite the recent sporadic purchases, many tyre makers in China preferred to buy rubber from domestic warehouses, which are sometimes quoted at a discount of up to 10 cents to tyre grades offered in Southeast Asia.

Cocoa butter ratios were likely to be steady at 1.0 times London futures because of steady purchases from chocolate makers, but powder prices could fall on ample supply in Asia and Europe. (Editing by Clarence Fernandez)