LONDON: Arabica coffee futures on ICE steadied on Thursday after hitting a 4-1/2 year high earlier in the session on fears over shrinking supplies and farmer defaults in Brazil, and as export delays in No. 2 producer Colombia also lent support.

COFFEE

July arabica coffee was flat at $1.5570 per lb at 1338 GMT, having hit its highest since late 2016 earlier at $1.5720.

Faced with a looming deficit, coffee farmers in Brazil are trying to renegotiate pre-agreed sales contracts with exporters and traders at higher prices, sparking widespread industry fears over defaults.

As dry weather continues, arabica output in Brazil is expected to shrink this season, while most exportable coffee is not reaching the ports in Colombia as widespread anti-government protests drag on.

July robusta coffee edged up 0.4% to $1,509 a tonne.

"Robusta suppliers have been holding back (sales) despite foreseeably high production as they have been hoping for additional price buoyancy generated by the Arabica market. Their strategy could work," Commerzbank said in a note.

SUGAR

July raw sugar rose 2.2% to 17.14 cents per lb, having hit a one-month low of 16.54 cents on Monday.

Top producer Brazil's center-south sugar and ethanol production in the first half of May progressed above expectations, nearing levels seen this time last season when the country had a record sugar crop.

Indian mills have started selling sugar without the support of government subsidies, which could lift exports by 14% to a record 6.5 million tonnes in 2020/21.

August white sugar rose 1.5% to $456.80 a tonne.

COCOA

September London cocoa fell 1.9% to 1,607 pounds per tonne.

September New York cocoa dipped 1% to $2,398 a tonne.

A fifth of cocoa purchases by multinational companies in Ivory Coast must be fulfilled by local firms to improve competition in the world's largest cocoa-exporting economy, according to a government decree.