SOFTS-Coffee firms, near 2-year peak, sugar dips
* China's industrial output growth below forecasts
* Arabica prices are up around 80 percent this year
By David Brough
LONDON, March 13 (Reuters) - Arabica coffee futures rose and traded near a two-year high, underpinned by concerns over drought in Brazil, while cocoa edged up on expectations of a global deficit and firm demand.
Raw sugar was flat and upside potential generally in soft commodities was capped by concerns over Chinese growth. China's industrial output growth came in below forecasts for the combined January/February period, with retail sales also weaker than expected, stoking worries that growth could slow as Beijing pushes for economic reforms.
"Disappointing Chinese industrial output data will take momentum out of markets that have done well," said Edward Bell, a senior commodities analyst at the Economist Intelligence Unit (EIU).
Arabica coffee prices have surged around 80 percent so far this year, fuelled by concerns over the crop impact of the unseasonably dry weather in Brazil.
"Once you get more certainty about the damage to the crop, the fundamentals will drive coffee again," Bell said.
May arabica coffee futures on ICE were up 0.1 cents or 0.1 percent at $2.0540 per lb by 1228 GMT. The contract peaked at $2.0975 on Wednesday, the highest level for the benchmark second position since February 2012. Continuación...