SOFTS-Raw sugar recovers from 2-1/2 year low; cocoa drifts down

LONDON, April 16 (Reuters) - Raw sugar futures on the ICE exchange recovered from a 2-1/2 year low on Wednesday, though prospects for improved supplies kept gains in check, while cocoa continued to drift lower.

SUGAR

Raw sugar SBc1 was up 0.6% at 17.62 cents per lb by 1200 GMT, having earlier matched Tuesday's 2-1/2 year low at 17.51 cents, while white sugar LSUc1 was flat at $490.10 a ton.

India is likely to see above-average monsoon rains for the second straight year in 2025, the government said. Dealers noted that rains should allow the world's No. 2 sugar producer to increase sugar exports.

Sugar production in top producer Brazil's centre-south region was nearly 10% higher than a year earlier in the second half of March as mills allocated more cane to sugar production.

Consultancy Safras & Mercado said the increased allocation to sugar came about as sugar stocks in Brazil's center-south were about 70% lower than average in the first quarter.

Dealers said the market meanwhile remains concerned a trade war between the U.S. and China could drag the world's two largest economies into a recession that would hurt demand for commodities including sugar.

COFFEE

Arabica coffee futures KCc2 slipped 0.3% to $3.6590 per lb, having lost 2.7% last week amid tariff-related recession fears, while robusta coffee futures LRCc2 fell 0.3% to $5,326 a metric ton.

Dealers said robusta is being boosted by reports of sharply lower robusta production out of Brazil, the world's second largest grower of the instant coffee ingredient.

Safras & Mercado said Brazil's production could be a bit bigger than expected in 2025. It, however, estimates farmers have sold only 14% of the new crop versus a 25% long-term average due to ongoing jitters over output prospects.

COCOA

London cocoa futures LCCc2 fell 1.1% to 5,742 pounds per metric ton, having lost 2.8% on Tuesday, while New York cocoa CCc2 fell 0.8% to $7,866 a ton.

Cocoa investors continue to fear a downturn in demand for the chocolate ingredient, with first-quarter cocoa grind data - a measure of demand - likely to show steep falls of 5% to 7% on Thursday, dealers said.

Brazil's cocoa grind fell 13% in the first quarter, though the decline was partly due to a lack of supplies and not just poor demand, dealers said.