* Glencore , Tohoku set thermal coal price at $61.6/T -sources
* Asian thermal coal price lost 14 pct in FY 2015/16
* Agreed contract price still well above spot prices
* Traditional benchmark under pressure as competition increases
TOKYO, April 19 (Reuters) - Glencore GLEN.L and Tohoku Electric Power 9506.T set a Australian thermal coal import price 9 percent below last year, although the traditional benchmark for industry pricing appears to be breaking down, sources said on Tuesday.
The contract price for the financial year beginning April 1 was set at $61.60 per tonne, down from $67.80 a year ago, four sources said, reflecting a global supply glut for thermal coal but still well above current spot prices.
The Tohoku/Glencore price has often set the benchmark for other Japanese utilities, but industry sources said the pricing mechanism was coming under pressure amid a shakeup of Japan's electricity market that has increased competition.
"What is happening this year is the traditional Japanese benchmark system is collapsing," said a source familiar with the negotiations. "We are hearing there will be different prices depending on where the coal comes from and also volumes."
Another source with direct knowledge of the matter said there were other contracts with lower prices, including ones below $60 per tonne, depending on where coal is mined.
"Given higher competition in the face of the liberalisation of Japan's retail electricity power market, buyers' evaluations and negotiations have become more strict," the source said.
"The utilities are not buying coal just by calories any more, but are trying to set different prices to reflect their evaluation of each mine," he added.
Competition among Japanese power and city gas utilities intensified this month when the companies lost their monopoly control over the retail power market. Tohoku spokesman said the company had reached an agreement with Glencore, but declined to comment further. Glencore was not immediately available for comment.
Australia accounts for about three-quarters of Japan's thermal coal imports. Shipments reached 86.8 million tonnes in 2015, with about 50 million tonnes covered by annual contracts.
Other potential buyers said they were slightly disappointed with the Glencore-Tohoku price, as spot coal has been traded at below $55 a tonne due to slow demand in Asia.
Asian benchmark thermal coal from Australia's Newcastle terminal GCLNWCPFBMc2 fell about 14 percent in the financial year to March 31, settling at $54.19 a tonne. The price has lost more than 60 percent since early 2011.
"The agreed price came a bit high, but Japanese utilities need to accept higher prices so that producers can stay in business and supply high-quality coal for a long-term," one buyer said.
Coal producer Peabody Energy Corp BTUUQ.PK filed for U.S. bankruptcy protection last week after a sharp drop in coal prices left it unable to service debt of $10.1 billion, much of it incurred for expansion in Australia. TABLE on Japan thermal coal imports