LONDON: ICE raw sugar posted modest losses on Wednesday as the prospect of increased production in the key centre-south region of Brazil heightened prospects for a global supply surplus.
Arabica coffee futures fell on ICE, extending a prolonged decline driven by ample supplies, while cocoa was little changed.
Brazil's 2012/13 center-south sugar cane crop that will begin crushing in weeks was forecast at 33 million tonnes of sugar, up 5.3 percent from 31.3 million tonnes this season, crop analysts Agroconsult said on Wednesday in its first forecast.
"I think there's still concerns about the delays but despite delays I think everybody still expects the amount of sugar coming out of central-south harvest crush is going to be significant and certainly shifting the world into surplus," said Keith Flury, soft commodities analyst with Rabobank.
Earlier this week, merchant Czarnikow raised its global sugar surplus forecast for 2011/12 to 7.7 million tonnes, up from a previous forecast of 6.1 million.
Front-month, May raw sugar on ICE was off 0.08 cent or 0.3 percent at 23.97 cents a lb at 1527 GMT after touching a two-week low for the contract of 23.85 cents.
London May white sugar futures fell $3.90 or 0.6 percent to $627.50 per tonne.
Thai white sugar prices have softened this week as more supply enters the market, while Indonesia has yet to make inquiries after it appointed a state-run firm to buy more than 200,000 tonnes of raws.
ROBUSTA GAINS
Robusta coffee futures on Liffe edged up, supported by a lack of selling by growers in leading producer Vietnam, with May up $16 or 0.8 percent at $1,971 a tonne.
"The Vietnamese crop, which is sizeable, hasn't really been pressuring that market (robustas), due to a lack of selling," Flury said.
"But I think it is only a matter of time before that crop is going to result in some harvest pressure (on prices)."
Vietnam, the world's second-largest coffee producer after Brazil, is forecast to export 984,400 tonnes, or 16.4 million bags, of the commodity this year due to low supply, the Agriculture Ministry said on Tuesday.
Arabica coffee futures on ICE were lower as the market extended recent losses fuelled by the prospect of a large crop in top coffee producer Brazil.
May arabicas were down 4.75 cents or 2.5 percent to $1.8830 per lb. The contract has lost about 18 percent of its value so far this year.
Dealers said the decline in prices may spur roaster demand.
ICE cocoa futures were little changed with May off a marginal $1 at $2,282 a tonne.
"There are some numbers circulating in the market that are confirming better crops out of (leading producers) Ghana and the Ivory Coast and I think that will have a negative impact on the price over the next month," one London-based cocoa dealer said.
London May cocoa was up 4 pounds or 0.3 percent at 1,480 pounds per tonne.
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