SOFTS Arabica coffee prices rebound, sugar futures ease

LONDON, Jan 25 (Reuters) – Arabica coffee futures on ICE were higher on Tuesday, regaining ground after falling for three consecutive sessions, while raw sugar prices were slightly weaker.

COFFEE

* March arabica coffee rose 2.1% to $2.3785 per lb by 1541 GMT.

* Dealers said the market had found some support after the recent sharp decline when it was caught in the overall sell-off in agricultural commodities linked to the prospect of the U.S. Federal Reserve tightening monetary policy soon.

* Tighter monetary policy typically hurts riskier assets such as commodities.

* Dealers also noted that demand for coffee was generally resilient and it could outperform some other commodities if the economic outlook becomes more bearish.

* They noted the price outlook for coffee could hinge on the extent to which last year’s frosts and drought adversely impact the forthcoming crop in top producer Brazil.

* «Arabica coffee may rise further if expectations for an adverse weather-related slump in Brazil’s production come to fruition over the coming months,» Saxo Bank said in a report.

* March robusta coffee rose 1.6% to $2,233 a tonne.

SUGAR

* March raw sugar fell 0.2% to 18.77 cents per lb.

* Dealers said a stronger dollar exerted some downward pressure on prices.

* They noted that March’s premium to May has been rising recently, possibly indicating appetite to take delivery against the front month contract, which expires at the end of next month.

* March white sugar fell 0.2% to $503.70 a tonne.

COCOA

* March London cocoa lost 0.2% to 1,695 pounds a tonne after dipping to a low of 1,689 pounds for its weakest level since Jan. 7.

* March New York cocoa rose 0.2% to $2,497 a tonne.

Reporting by Nigel Hunt
Editing by David Evans and David Goodman

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