Arabica coffee, sugar climb as Brazilian currency strengthens

LONDON: Arabica coffee futures on ICE were higher on Thursday and raw sugar also advanced, with both markets supported by the strength of Brazil's real currency .

A stronger real tends to discourage selling by Brazilian producers.

The currency climbed after Brazil's lower house of Congress approved a landmark overhaul of the country's pension system by a wider-than-expected margin.

COFFEE

* September arabica coffee was up 1.40 cents, or 1.3%, to $1.0730 per lb at 1217 GMT.

* Dealers said the market was regaining ground after falling sharply early this week.

* The market touched a seven-month peak of $1.1565 on Friday on fears over forecast frost in top producer Brazil over the weekend, but then fell back as early assessments suggested only minor crop damage.

* September robusta coffee rose $12, or 0.8%, to $1,442 a tonne.

* Vietnamese domestic coffee prices were marginally lower on Thursday from a week earlier, with trading activity expected to remain muted until the next harvest that will begin in October.

COCOA

* September London cocoa fell 9 pounds, or 0.5%, to 1,867 pounds a tonne.

* Dealers said a stronger pound contributed to a slight decline in prices as the market extended its retreat from last week's one-year high of 1,939 pounds.

* The market's recent strength has been linked to plans by top producer Ivory Coast and Ghana to increase the price paid for their cocoa to help combat farmer poverty.

* Strong demand has also underpinned the market, helping to absorb a larger crop in Ivory Coast this season.

* "Going forward, global cocoa supply and demand are expected to remain balanced," chocolate maker Barry Callebaut said in a statement on Thursday.

* September New York cocoa rose $12, or 0.5%, to $2,521 a tonne.

SUGAR

* October raw sugar was up 0.09 cents, or 0.7%, at 12.59 cents per lb.

* Dealers said the stronger real was the main supportive factor although some concerns that a weaker-than-normal monsoon could curb production in India also underpinned the market.

* August white sugar rose $0.30, or 0.1%, to $321.70 a tonne.