LONDON: Arabica coffee prices on ICE hit a three-month low on Tuesday, with the market vulnerable in the short term due to a weakening Brazilian real and a glut of near-term supply.

A weak real allows exporters in Brazil to raise more money in local currency terms when selling dollar-denominated coffee.

COFFEE

* December arabica was down 0.2 cents, or 0.2%, to 94.65 cents per lb at 1144 GMT, after hitting its lowest since May 23 at 94.60 cents.

* The dollar index rose, boosted by slightly higher Treasury yields and as investors bet stimulus measures in China and Germany would help stave off a global economic downturn.

* The uptick in the dollar bodes ill for the real, which hit a three-month low versus the US currency on Monday and has lost some 8% over the past month.

* "The market is vulnerable in the short term because the real is low and the funds are short in arabica, but not anywhere near the record shorts," said Carlos Mera, senior commodities analyst at Rabobank.

* The coffee market also continues to absorb excess nearby supplies following a massive harvest in Brazil last year.

* "At some point, the lower 2019/20 (Brazilian) crop will start to have an impact, but this may not happen for several months," said Marex Spectron in a note.

* November robusta was flat at $1,319 a tonne.

SUGAR

* October raw sugar was down 0.03 cents, or 0.3%, at 11.44 cents per lb, having hit its lowest in 1-1/2 weeks.

* The market continues to be weighed down by excess near-term supplies, weakness in the real, worries over poor demand in Asia, and bets that India will announce an extension of its sugar export subsidy system until September 2020.

* Marex Spectron expects a maximum of 6 million tonnes will be subsidised, up from 5 million tonnes last year.

* "There seems little reason for the market to improve anytime soon while (it) awaits news from India," said a dealer.

* October white sugar was down $0.5, or 0.2%, at $309.90 a tonne.

COCOA

* December New York cocoa was down $7, or 0.3%, at $2,184 a tonne, having hit a five-month low on Friday amid improving crop weather in West Africa.

* "Ivory Coast is likely to see a record high 2.3 million tons of cocoa harvested in the 2018/19 season. The prospects for the next main crop from October are likewise very good," said Commerzbank in a note.

* December London cocoa fell 2 pounds, or 0.1%, to 1,715 pounds a tonne.