LONDON, Oct 4 (Reuters) - Raw sugar futures were lower on Thursday as prices fell back after a recent strong advance to a 3-1/2 month high while arabica coffee prices also fell.
* March raw sugar was down 0.13 cent, or 1.1 percent, at 12.10 cents per lb at 0952 GMT, extending a pullback from the prior session’s 3-1/2 month high of 12.38 cents.
* Dealers said the market’s recent run-up had been driven by speculators scaling back a large net short position against the backdrop of a strengthening in the currency of top producer Brazil..
* A cautious optimism that the winner of Brazil’s presidential elections will manage to rein in growing public debt will likely support the Brazilian real, the latest Reuters poll showed, even as uncertainty over the currency shoots through the roof.
* Dealers said, however, that while a stronger real could slow selling by Brazilian producers, a weaker rupee could increase the likelihood of exports from India.
* The Indian rupee plumbed record lows as global oil prices rose and stocks and bonds weakened on Thursday, heightening speculation that the central bank may hike interest rates on Friday more aggressively than previously expected.
* “India’s Rupee declining to new all-time lows is worth noting. When the market returns to weighing up India exports, the export parity price will now be lower,” Commonwealth Bank of Australia analyst Tobin Gorey said.
* December white sugar rose $0.40, or 0.1 percent, to $339.10 a tonne.
* December arabica coffee fell 1.15 cents, or 1.1 percent, to $1.0545 per lb. The contract peaked on Wednesday at $1.1080, the highest level since August 9.
* Dealers said a modest setback was not unexpected given the extent of recent gains, with prices rising 12 percent from a low of 95.10 cents set on September 18 to Wednesday’s peak.
* November robusta coffee rose $3, or 0.2 percent, to $1,591 a tonne.
* December New York cocoa rose $8, or 0.4 percent, to $2,027 a tonne.
* Dealers said, however, that the market remained in striking distance of Monday’s low of $1,982, the weakest since January, and there could be a test of support around that level in the near future.
* December London cocoa rose 9 pounds, or 0.6 percent, to 1,507 pounds a tonne. (Reporting by Nigel Hunt; Editing by Kirsten Donovan)