* Daewoo expects order to build largest ever container ship

  * Press conferences due at 0930 GMT

  * Daewoo shares up 3.4 pct

  (Adds details, shares, comments)

  SEOUL, Feb 21 (Reuters) - Daewoo Shipbuilding & Marine Engineering said on Monday it expected to win a 2 trillion won ($1.8 billion) order from A.P. Moeller-Maersk AS to build 10 container ships, confirming an earlier Reuters report.

  The deal reflects growing confidence in the global container ship market, which has been on a solid growth track after the global financial crisis, and adds to a series of recent deals placed with the world's top shipyards.

  The weekly Howe Robinson Container Index, which tracks the charter market for container shipping lines, has trended upward since hitting a bottom in December 2009, according to the Korea Maritime Institute.

  Daewoo is also in talks with Maersk on an option to build an additional 10 ships with the capacity to carry 18,000 twenty-foot-equivalent containers, the largest available.

  The option could bring the total value of the order up to $4 billion, the shipbuilder's largest-ever.

  Maersk, the owner of the world's largest container shipping firm, will hold news conferences simultaneously in London and Hong Kong at 0930 GMT, it said earlier.

  " While we believe the order indicates bullish long-term sentiment for containerised trade demand expectations from a major shipping line, we remain cautious, as this order alone would increase the global container ship order book by nearly 5 percent," said Michael Webber, shipping analyst with Wells Fargo Securities.

  " We will continue to monitor developments in the order book, as we note that the sector has a propensity to overbuild."

  Shares in Daewoo jumped 3.2 percent by 0430 GMT, beating a 0.5 percent drop in the wider market.

  Its Korean rivals are also eyeing large container ships with prospects for rising orders from global shippers amid a consumption pickup.

  Hyundai Heavy Industries received an order to build six large container vessels in February, reportedly worth around $800 million.

  Last year, Samsung Heavy Industries also won an approximately $2 billion order for 20 container ships from Taiwan's Evergreen Group, which includes the world's fourth-biggest marine shipper Evergreen Marine.

  (Reporting by Ju-min Park Additional reporting by Randy Fabi in SINGAPORE Editing by Jonathan Hopfner)

* Population shifts to industrial areas pressure food prices

  * Regulators could produce " reasonability limits"

  * Sugar importers struggle for margins due to price swings

  By David Brough

  DUBAI, Feb 21 (Reuters) - Food inflation is set to continue for some time as populations shift to industrial areas and emerging economies grow, Charles Funnell, a soft commodities trader with Swiss-based fund manager Aisling Analytics, said.

  Funnell also said in an interview with Reuters Insider television that sugar importers were struggling to make margins due to high price volatility, and that in his view regulators may move to set " reasonability limits" to calm price swings.

  ICE March sugar hit a contract high of 36.08 cents a lb on Feb. 2, the highest price level in three decades.

  Food price inflation has surged up the political agenda globally after sharp rises in prices of grains and soft commodities, including sugar, coffee and cocoa.

  Recent swings in futures markets such as sugar, driven in part by computer-generated trading, have complicated pricing even further.

  " The bad news for the consumer is that it (food inflation) is probably going to continue, and the reason is that there are more people, and people are moving from agricultural areas to industrial areas, and they're consuming more," Funnell said.

  Speaking on the sidelines of the Feb. 19-22 Kingsman Dubai sugar conference, he said that as economies in countries such as China and India grow, and disposable incomes rose, food inflation would take root.

  " Inflation is part and parcel of the future and the challenge really for the world (soft commodity) market is extreme volatility and price spikes, which will mean that the market needs to incentivise producers to make more."

  Funnell said it takes time to produce food, with the growth period for sugar production, for example, lasting 12-18 months, and yet people want price stability.

  " We're going to have an inflationary environment for food price until producers catch up," he said.

  Funnell said regulators, faced with anger from food importers struggling to manage risks, could introduce measures to calm price volatility.

  " New regulations could be brought into place, for example in the sugar market specifically, to produce reasonability limits to prevent some of these enormous price swings," he said.

  " The importance of putting these regulatory changes in place is paramount to ensure the proper liquidity and volatility in the sugar market."

 

  RISK MANAGEMENT

  Funnell said that big swings in futures markets, with sugar futures sometimes moving $100 a tonne in a day, made it much harder for food importers to guarantee margins.

  " The challenge is for importers to make that margin and not be badly priced in a market that is this volatile. The volatility is what causes them their main concern."

 

  (Reporting by David Brough Editing by Ed Lane)

BEIJING, Feb 21 (Reuters) - China has not yet set a timetable for allowing bank deposit rates to be set by market forces, the country's top banking regulator Liu Mingkang said in remarks published on Monday.

  Liu's comments came after the central bank denied a report that it had begun a pilot scheme to liberalise deposit rates. [ID:nTOE71F00A]

  Chinese banks are projected to make a total profit of 700 billion to 800 billion yuan this year, said Liu, chairman of the China Banking Regulatory Commission, without providing a comparative figure.

  " Banks' profits will mainly come from net interest margins and commission income, and they will be more active in using innovative financial products in the future," he was paraphrased as saying by the official China Securities Journal.

  China currently sets a ceiling on deposit rates and a floor on lending rates, with a roughly 3 percentage point gap between them, a spread that is the source of a large portion of bank revenues.

  The People's Bank of China has long pledged to move to a more market-based system for setting interest rates to ease distortions in the economy, but it has proceeded cautiously for fear of fuelling financial risks.

  Liu added that the growth of loans to the property sector has slowed from its peak in 2009, playing down concerns that bank loans are fueling real estate speculation.

  " The loan growth to the property sector has slowed to 20 percent from 30 percent, and 80 percent of new mortgage loans are for first home buyers," Liu added. (Reporting by Aileen Wang and Ken Wills)

* Tighter China credit market may offer opportunities

  * Bullish outlook for Asian commodity, trade financing

  * China's policy tightening risks growth

  By Jennifer Tan

  SINGAPORE, Feb 21 (Reuters) - China's huge appetite for resources and tightening of its credit markets could be a boon by generating more U.S. dollar-funding opportunities for commodity flows, an executive from Rabobank said.

  " Due to tighter liquidity conditions in China, we see more opportunities to finance producers, helping them secure raw materials and fund capital expenditures," Kenny Wei, head of trade & commodity finance for Asia Pacific, told Reuters in an interview.

  The Dutch bank is looking at double-digit growth for its Asian commodity and trade financing volumes in 2011, similar to last year's growth rates, with China being the " deciding factor" , Wei said. He declined to give specific growth numbers.

  Rabobank's commodity and trade finance business focuses on the financing of raw materials from producers to end-users via traditional Letters of Credit, as well as inventory financing and freight loans.

  " We were able to build a good base in the fourth quarter -- we had strong deal flows through the end of last year, which means the first quarter should be quite good," he said.

  " But things can change if there is further tightening of liquidity in China. We will have to see how that will affect our business. Right now, it's too early to tell."

  China's consumer price data released earlier this week showed inflation was lower than expected at 4.9 percent in the year to January, but signs of a continued rise in price pressures reinforced expectations the central bank would stick to its course of monetary tightening.

  China has hiked rates three times since October and raised banks' reserve requirements seven times since early last year.

  Rabobank, the largest retail bank in the Netherlands and one of the world's largest agricultural lenders, posted a net profit of 1.66 billion euros for the half year ended June 30, up from 1.32 billion euros a year earlier. It will report full-year earnings in early March.

  Apart from China, Rabobank expects India to be the other key market that could materially impact performance this year.

  Rabobank is seeing strong iron ore trade flows from India to China, as well as robust demand for agricultural commodities such as palm oil products, Wei said.

  Spot iron ore prices < IODBZ00-PLT> are trading at record highs, driven by tight Indian supplies and strong demand from top buyer China.

  The bank has commodity and trade finance operations in four of its branches in Asia -- Shanghai and Hong Kong, which cover the China market Singapore, which is charge of Indonesia, India, Thailand and Malaysia, as well as Sydney, which covers the Australian and New Zealand markets.

  Its commodity and trade finance unit in Singapore is focused on the energy and agriculture sectors, while Australia is focused on agricultural flows. The Hong Kong and Shanghai units cover the energy, agriculture and metals sectors.

  The outlook for commodity financing in the region remains bullish, although price volatility could dominate.

  " Demand will be there fundamentally, whether you are talking about eight or 10 percent growth for China. In terms of volumes, there is a strong flow that needs to be fulfilled for China's demand," Wei said.

  " The question is whether you will see those exorbitant prices," he added, referring to record prices for cotton and iron ore.

  U.S. cotton futures hit an all-time high near $2 a lb earlier this month on low supplies and speculative buying.

  China's blistering economic growth is likely to moderate slightly this year from an estimated 10 percent in 2010, but price pressures have continued to build up.

  Commodities enjoyed a strong rally in 2010, driven by robust emerging market demand. The benchmark Reuters-Jefferies CRB index rose 15 percent last year, with a gain of more than 10 percent in December alone.

  On Friday, the 19-commodity index settled at 341.78, up 0.2 percent. The index has risen 2.7 percent so far this year, after hitting an intra-day high of 345.19 on Feb. 3. (Reporting by Jennifer Tan Editing by David Fogarty)