ICE raw sugar futures rose on Thursday, edging back towards last week's one-year high amid tightening supplies, while arabica coffee slid from this week's two-year peak.
SUGAR
March raw sugar rose 0.04 cents, or 0.2%, to 13.46 cents per lb at 1313 GMT, having hit a more than one-year high of 13.67 cents last week.
Sugar has consolidated this week with funds now having largely covered a net short position that exceeded 200,000 lots in early November.
Dealers said it remained to be seen whether funds were ready to build a net long position, though production deficits, a stronger Brazilian real and improving crude oil prices meant they were more likely to buy than sell.
A global deficit is widely expected in the current 2019/20 season. Sugar rallies are capped however, given weak demand growth, high global stock levels and top producer Brazil's ability to ramp up output at the right price.
"The more strength we see in world (sugar) prices, the more likely we will see stock make its way onto the market in the form of exports," said ING in a note March white sugar rose $0.90, or 0.3%, to $356.40 a tonne.
COFFEE
March arabica coffee fell 5.1 cents, or 3.9%, to $1.2800 per lb. The contract rose to a peak of $1.3840 on Tuesday, the highest in more than two years, but has since fallen back in volatile, holiday-thinned trade.
Prices have gained some 40% since mid-October, supported by fund buying amid tightening supplies, with exchange arabica stocks falling and a global deficit widely forecast for the 2019/20 season.
A dealer said the market was consolidating given the recent stellar gains were excessive, driven largely by momentum-based fund buying.
Uganda's coffee exports rose 7% in November from a year ago, boosted by favourable weather and traders releasing higher volumes to meet outstanding obligations for the year.
March robusta coffee was down $26, or 1.8%, at $1,383 a tonne.
Vietnam's domestic coffee prices edged up slightly from last week as lacklustre bean prices prompted farmers to hold off selling.
COCOA
March New York cocoa was down $18, or 0.7%, at $2,489 a tonne, having hit its lowest since Nov. 11. March London cocoa fell 9 pounds, or 0.5%, to 1,772 pounds a tonne.
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