March 4, 2020 / 2:08 PM / in a month

SOFTS-Arabica coffee slips off 7-week peak, cocoa and sugar ease

LONDON, March 4 (Reuters) - Arabica futures on ICE fell on Wednesday as the market readjusted after soaring to a seven-week peak in the prior session, while cocoa and sugar prices slipped again on fears over the coronavirus outbreak.

COFFEE

* May arabica coffee was down 1.85 cents, or 1.5%, to $1.2035 per lb at 1347 GMT, after setting a seven-week high of $1.2140 on Tuesday and clocking gains of 7% in February.

* Tight supplies of exchange-deliverable, washed coffee have prompted certified stock falls KC-TOT-TOT and soaring premiums in the physical market, boosting futures.

* “The concerns on the lack of availability of washed coffee (are) ongoing and they won’t go away because of the latest (futures price) upside,” said Rabobank.

* Still, arabica could top out near term as funds have a relatively small net short position so there won’t be huge short covering volumes coming from their side, said a dealer.

* May robusta coffee was down $15, or 1.1%, at $1,316 a tonne.

SUGAR

* May raw sugar was down 0.1 cents, or 0.7%, at 13.67 cents per lb after hitting its lowest since early January at 13.60 cents.

* Sugar is losing steam on concerns the coronavirus outbreak will hit global growth hard. A surprise rate cut by the U.S. Federal Reserve on Tuesday has so far done little to stem these fears.

* The market, however, remains underpinned by tightening supplies with a significant global deficit widely forecast for the current 2019/20 season.

* “The fall in prices appears excessive. The International Sugar Organisation has revised up its 2019-20 deficit to almost 10 million tonnes. Such a scenario will no doubt allow sugar to recover once fears linked to the coronavirus have waned,” said Agritel in a report.

* May white sugar fell $2.20, or 0.6%, to $387.00 a tonne.

COCOA

* May New York cocoa was down $6, or 0.2%, at $2,647 a tonne after setting a six-week low of $2,624 on Monday.

* Fund long liquidation has weighed on cocoa along with some concerns the coronavirus may curb demand.

* May London cocoa fell 5 pounds, or 0.3%, to 1,944 pounds a tonne. (Reporting by Nigel Hunt; Editing by Barbara Lewis and Mark Potter)

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