* Benchmark arabica coffee down 17 pct from last month’s highs
* China April sugar imports down 24 pct, year-on-year
* Cocoa lifted by bullish charts, long-term deficit worries (Updates prices, adds market comment, details throughout; adds byline, NEW YORK dateline)
By Chris Prentice and Nigel Hunt
NEW YORK/LONDON, May 21 (Reuters) - Arabica coffee futures on ICE sank on Wednesday, under pressure from position rolling out of the spot contract and uncertainty over the severity of crop damage in top grower Brazil due to drought earlier this year.
ICE raw sugar fell on sluggish demand and cocoa futures crawled to a three-week high.
July arabica coffee futures on ICE Futures U.S. were down 3.85 cents, or 2.1 percent, to $1.8185 per lb by 12:25 p.m. EDT (1625 GMT), hovering above Tuesday’s six-week low.
The benchmark contract has toppled 17 percent from a peak of $2.19 set almost a month ago as traders cut their outlooks for Brazil supplies.
The country’s arabica harvest should pick up speed next month with most estimates for crop losses from dry, hot weather from January through mid-March around six to seven million bags.
“It is seems like it (the extent of damage to Brazil’s crop) is not as bad as people were expecting or fearing. Sentiment has turned to setback,” said Romain Lathiere, head of dealing at Diapason Commodities Management.
Capital Economics analyst Thomas Pugh said he expected prices to fall over the year with stocks high after years of overproduction ensuring there should be no shortage of beans.
July robusta coffee futures on Liffe lost $23, or 1.1 percent, at $2,013 a tonne.
In sugar, the July raw futures contract on ICE sank 0.16 cents, or 0.9 percent, to 17.42 cents a lb in heavy trade.
Huge supplies in key producers like Brazil and Thailand and weak demand weighed, evaporating cash premiums, dealers said.
Last week’s boost in fund buying “is already fading,” said Michael McDougall, senior vice president at Newedge USA, referring to a big boost in speculators’ buying as prices began to rally last week.
August white sugar futures on Liffe fell $4.70, nearly 1 percent, at $473 per tonne.
China’s sugar imports were at 272,616 tonnes last month, down over 24 percent from April 2013, according to customs data issued on Wednesday.
ICE July cocoa edged up to three-week high of $2,996 higher before closing up $13, or 0.4 percent, at $2,981 a tonne.
July cocoa futures in London settled up 8 pounds, or 0.4 percent, at 1,865 pounds a tonne after touching a one-month high of 1,872 pounds as a bullish technical outlook and demand hopes bolstered.
A Barry Callebaut senior official said No. 3 producer Indonesia should push to double output to feed Asia’s growing appetite for chocolate.
Even so, cocoa arrivals during Ivory Coast’s main crop this year were up almost 15 percent from the prior year at 1.24 million tonnes.
ICE soft agricultural commodity futures and options markets will be closed on Monday, May 26, for the U.S. Memorial Day holiday. (Editing by William Hardy, David Evans and Marguerita Choy)