Arabica coffee prices soar

Arabica coffee prices soar ; Thursday, with arabicas less than 10 cents away from a fresh 13-1/2 year peak, as the market remained underpinned by a shortage of high quality washed arabica beans.

Cocoa futures edged up, supported by a risk premium stemming from the disputed election in the world's top producer, Ivory Coast, on Nov. 28, while sugar eased in modest volumes, underpinned by tight global supplies.

Costa Rica was the latest arabica producer to cut its forecast for the 2010/11 coffee harvest after heavy rains hit crops, reversing earlier forecasts of a rise compared with last year.

"There will be no large scale recovery in production in Colombia or other Central American producers," said Stefan Uhlenbrock, a commodity analyst at Germany-based F.O. Licht.

"Washed arabicas will remain tight this year."

ICE March arabicas were up 2.00 cents or 0.9 percent at $2.3500 a lb at 1200 GMT.

London March robustas were up $28 or 1.4 percent at $2,033 per tonne in slim volume of 1,820 lots.

Cocoa futures edged higher in light volumes as dealers said exports continued apace from top producer Ivory Coast, where the disputed presidential vote has sparked fears of disruption to supplies.

ICE March cocoa traded up $5 or 0.2 percent at $2,857 a tonne in modest volume of 1,581 lots at 1303 GMT.

London second-month cocoa was up 3 pounds or 0.2 percent to 1,945 pounds per tonne in thin turnover of 780 lots.

"On a pure supply and demand basis, the market is overpriced and should come down, but you have to respect there are real risks in Ivory Coast," a European trader said.

New York cocoa is expected to rise towards $3,060 per tonne, as the correction that started from the Dec. 17 high at $3,140 could have been completed, Reuters analyst Wang Tao said.

Ivory Coast's presidential claimant Alassane Ouattara said on Thursday he had proof his rival, Laurent Gbagbo, had instigated post-election violence and ordered foreign agents to carry out killings.

ICE raw sugar futures fell, in a technical correction to a sharp rise the previous session, amid choppy trading in commodity markets at the start of the New Year.

Trade on the physical market remained slow due to the historically high prices, with raw sugar remaining near last week's 30-year peak of 34.77 cents a lb.

The sugar market is supported by tight global availability and low inventories after adverse weather eroded output in several key producing countries.

Dealers are focused on how much sugar India can export during the period before the next Brazilian crop around April.

"Overall, we continue to be more friendly to the flat price in the medium term and would suggest considering playing the market from the long side on dips," said Thomas Kujawa of broker Sucden Financial.

ICE March raw sugar was down 0.44 cent or 1.4 percent at 31.76 cents a lb at 1246 GMT. London March white sugar was down $5.80 or 0.8 percent at $770.10 per tonne.