SOFTS-ICE coffee, sugar prices ease as commodities retreat
* Robusta prices underpinned by declining Liffe stocks
* Bunge sees 8-10 mln T sugar surplus in 2012/13
* Improved demand, slower arrivals underpin cocoa
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LONDON, Nov 28 (Reuters) - Sugar and coffee futures on ICE were slightly lower on Wednesday, tracking a generally softer tone to commodity markets due to economic concerns.
Cocoa prices were firm as dealers monitored bean arrivals in West Africa which have been lower than expected.
Stocks, commodities and the euro fell on Wednesday on investor frustration with a lack of progress in U.S. budget talks and as doubts crept in over Greece's new debt deal.
Dealers said arabica coffee was in a prolonged downtrend driven by weak fundamentals with the market well supplied after a large harvest in top grower Brazil earlier this year.
Speculators have built up a large net short position in arabica coffee during the decline in prices although they have begun to trim it slightly.
The market should also tighten next year when Brazil has an off-year in its biennial crop cycle which causes output to rise then fall from one year to the next with variations of 15 percent to 20 percent.
"Arabica prices are down over 52 percent from the 2011 high. However, in our view, a potential deficit season in 2013/14 and an already large short speculator position will temper further downside," Rabobank said in a report on Wednesday.
March arabica coffee futures were off 1.35 cent or 0.9 percent at $1.4780 per lb at 1530 GMT. The contract slumped to $1.4710 earlier in the session, the lowest level for the benchmark second month since June 2010.
Robusta coffee futures on Liffe were slightly higher with recent price weakness leading to a slowdown in sales from Vietnam while declining exchange stocks also helped to underpin the market.
January robusta coffee futures were up $6 or 0.3 percent at $1,917 a tonne. The contract fell to $1,836 on Monday, the lowest level for the second month since Feb. 6.
Dealers said Liffe certified stock data, to be issued later this week, is also expected to show a continued drawdown.
Liffe certified stocks stood at 108,580 tonnes, as of Nov. 12 after falling by 17 percent since the start of October.
Raw sugar futures were also slightly lower with March off 0.16 cent or 0.8 percent to 19.07 cents a lb as the prospect of a substantial global surplus in 2012/13 kept the market on the defensive.
Global sugar production in 2012/13 should exceed consumption by between eight and 10 million tonnes, Ben Pearcy, managing director sugar and bioenergy for agribusiness giant Bunge said on Wednesday.
Dealers said the market had settled down to drift in a narrow band after rebounding from a two-year low for the front month of 18.66 cents set on Nov. 9.
"In next six months we'll have a range of between 16 and 20 cents," said Jonathan Drake, head of sugar at RCMA, speaking at the International Sugar Organization seminar in London.
Drake noted that as there's always reluctance to sell below the cost of production - which he estimated at around 17 cents to 18 cents - the market was likely to slowly "grind lower".
March white sugar on Liffe fell $2.30 or 0.5 percent to $508.40 per tonne.
Cocoa futures on ICE were slightly higher with March up $12 or 0.5 percent at $2,459 a tonne as the market continued to lack any clear overall trend.
"We're basically stomping over old ground," one London broker said.
Dealers said the market was keeping a close watch on the flow of main crop cocoa in top growers Ivory Coast and Ghana with port arrivals running behind last year.
"In the wings there's some debate going on about arrivals, about deficits, looking at slightly improved demand so that's sort of underpinning things," the broker added.
Benchmark Liffe March cocoa futures were up 11 pounds or 0.7 percent at 1,571 pounds a tonne.
(Additional reporting by Stephen Eisenhammer and Sarah McFarlane; editing by Alison Birrane and Keiron Henderson)