African states seek 500 mln euros in EU banana deal

* ACP seeks 500 mln euros from EU in banana compensation

* Smaller tariff cuts, longer time sought by ACP producers

* EU, Latam talks on ending banana wars continue in Geneva

* Overall deal seen by EU at end of June

By Darren Ennis and Bate Felix

BRUSSELS, May 29 (Reuters) - Africa's top banana export countries sought on Friday 500 million euros ($694 million) in compensation from the European Union as part of a deal to end the world's longest-running trade dispute.

Talks drag on at the World Trade Organisation in Geneva between the EU and Latin America's leading banana suppliers aimed at reducing import tariffs and end the "banana wars" that have dragged on since the 1990s.

As part of the pact, Brussels must find a package of financial aid for rival banana-producing African, Caribbean and Pacific (ACP) countries to compensate them for possible losses to their industry and ease any socio-economic hardships that the liberalisation would mean for some of its former colonies. But ACP producers -- which have for years enjoyed duty-free access to the lucrative European market -- told EU ministers at talks on Friday in Brussels that the 27-nation bloc's latest offer, estimated to be around 100 million euros, is not enough.

"An update on the ACP's support needs ... indicates that an envelope of close to 500 million euros would be required to avoid social turmoil and political instability in the ACP countries concerned," a statement prepared by the ACP delegation for the ministerial meeting said.

The European Commission -- which oversees trade policy for the EU -- has proposed gradually lowering taxes on banana imports from Latin American countries to 114 euros per tonne by 2016 from 176 euros now.

But ACP producers such as Cameroon and Ivory Coast, want smaller tariff cuts over a longer period, the declaration obtained by Reuters showed.

SWAMPED

They say Europe will become even more swamped by cheaper fruit from Latin America, which already supplies some 80 percent of EU banana imports, to the detriment of former colonies of Britain, France and Portugal.

"ACP countries will immediately suffer drastic losses which would also have to be compensated for immediately," they argued.