Arabica coffee on ICE recovered on Tuesday after hitting a 1-1/2 month low in the prior session, while raw sugar also gained as the wider financial markets shrugged off worries the Omicron coronavirus variant could choke the global economic recovery.

Coffee

March arabica coffee was up 0.7% to $2.2485 per lb at 1220 GMT, recovering from Monday's 1-1/2 month low. Arabica closed last year up 76%.

Dealers said arabica, the biggest gainer among all commonly traded commodities last year, was likely to fall next week due to fund index rebalancing.

They estimate the Bloomberg Commodity Index, for example, needs to sell roughly 1% of its coffee portfolio to meet its coffee allocation target for this year. This equals about 13,000 lots of selling, they said.

Honduran coffee exports almost doubled in December versus a year earlier to reach 386,806 60-kg bags, data showed.

March robusta coffee fell 0.8% to $2,350 a tonne. The contract hit a 10-year high of $2,384 last Thursday, and ended last year up 71%.

Robusta coffee slips from 10-year peak, sugar edges up

Sugar

March raw sugar rose 0.3% to 18.80 cents per lb. The contract ended 2021 up 21.9% but has since struggled.

Dealers said sugar's upside was limited for now as lacklustre demand meets adequate supply and improved prospects for the next crop from top producer Brazil.

Brazil has seen widespread rains in the centre-south region of late.

Indian sugar mills have produced 11.56 million tonnes of sugar in the first three months of 2021/22 marketing year, up nearly 4.3% from the same period a year earlier.

March white sugar rose 0.3% to $495.70 a tonne.

Cocoa

March New York cocoa fell 0.1% to $2,496 a tonne. The contract ended 2021 down just over 3%, bucking the trend in sugar and coffee.

Dealers said the decrease in New York cocoa's open interest in the last few days suggested speculators had further liquidated their long positions.

March London cocoa fell 0.4% to 1,695 pounds per tonne.