SOFTS-Arabica coffee rallies, raw sugar scales fresh two-month peak

Recasts, updates prices, adds details

LONDON, Feb 19 (Reuters) - Arabica coffee futures traded on the ICE exchange rallied on Wednesday, recovering from a sharp slide that took them off their recent record peaks, while raw sugar scaled a new two-month high.

COFFEE

Arabica coffee KCc2 rose 3.8% to $4.2055 per lb by 1645 GMT, having hit a 1-1/2 week low on Tuesday that took it further away from last week's record of $4.2995.

Brazilian coffee co-op Cooxupe, the country's largest exporter of the beans, projects it will receive nearly 10% less coffee from farmers in 2025 as the dry, hot weather last year will cut coffee production in the areas where it operates.

Having corrected somewhat from a stellar rally in which it hit 14 successive records this year, dealers said arabica can not fall far given the prospect of a smaller 2025/26 crop in top grower Brazil this year.

There are warnings that dry conditions are expected in Brazil over the next week or so, they noted, while the pace of decline in ICE-certified stocks KC-TOT-TOT is picking up.

Consultancy Safras & Mercado said Brazil farmers had sold 88% of the 2024/25 crop, ahead of 79% at this time last year and higher than the five-year average of 82%.

Robusta coffee LRCc2 rose 1.2% to $5,791 a metric ton.

SUGAR

Raw sugar SBc1 rose 1.2% to 20.76 cents per lb, having set a two-month high of 20.77 cents.

Diminishing sugar production prospects in India are driving prices, with early mill closures sparking talk the world's No. 2 sugar producer will export just 700,000 tons this season, well short of the one million tons export quota.

"The early mill closures in India are being blamed on dry conditions. World Weather Service is also saying drying in east-central and northeastern Brazil will eventually lead to sugarcane stress," said broker ADMISI in a note.

White sugar LSUc1 rose 1.1% to $547.60 a metric ton.

COCOA

New York cocoa futures CCc2 fell 0.8% to $10,402 a ton, having closed up 1.6% on Tuesday.

Mondelez MDLZ.O CEO Dirk van de Put said consumers will need to get used to chocolate that is 30% to 50% more expensive than it used to be "because that's what we're going to see" due to a supply crisis in Africa.

London cocoa LCCc2 edged up 0.2% to 8,181 pounds per ton.