SOFTS-ICE coffee edges up, demand growth underpins market
* Rebound in raw sugar futures stalls
* Robusta coffee underpinned by demand growth
* Light origin selling weighs on cocoa prices
(Adds quotes, updates prices)
LONDON, Dec 19 (Reuters) - Arabica coffee futures on ICE edged up on Wednesday although prices remained within striking distance of a 2-1/2 year low set last week as increasing supplies from Brazil and Central America helped to cap prices.
Raw sugar futures were slightly weaker as a rebound from the lowest levels in more than two years stalled while cocoa prices also lost ground.
Dealers said a growth in demand for coffee had helped to mitigate the effects of rising global coffee production with the U.S. Department of Agriculture earlier this week forecasting a record crop in 2012/13.
"The USDA report provided a reminder that there is another world record crop in 2012/13 but underpinning prices is demand growth," Andrea Thompson, analyst at Coffee Network, part of INTL FCStone, said.
March arabica futures on ICE rose 0.40 cent or 0.3 percent to $1.4440 per lb by 1159 GMT. The contract dipped to $1.4220 last week which was the lowest level for the then second month since June 2010.
Prices had fallen by more than 50 percent from a highs set in May 2011 and may be set to consolidate around current levels.
"We've come a long way already and my feeling is the downside is limited at the minute...The world market needs these record crops at the moment because of demand," Thompson said.
ICE March coffee may slide more to $1.40 per lb, and then bottom around this level, according to Reuters analyst Wang Tao.
Robusta coffee futures on Liffe were also higher with March up $22 or 1.2 percent at $1,864 a tonne.
Thompson said the low level of Liffe certified stocks, despite strong exports from top robusta producer Vietnam in recent months, showed that demand had been strong.
Raw sugar futures on ICE were slightly lower with March off 0.03 cent or 0.15 percent at 19.36 cents a lb.
The contract has rebounded after dipping last week to 18.31 cents, the lowest level for the benchmark front month since August 2010.
Dealers said the rebound, which has been fuelled partly by speculators trimming their largest net short position in more than five years, appeared to have stalled and the focus had returned to excess supplies with a substantial global surplus widely forecast for 2012/13.
Index fund rebalancing around the turn of the year is, however, expected to be supportive for sugar and could give the market fresh upside momentum.
A bullish target at 19.68 cents per lb remains intact for ICE March sugar, as indicated by its wave pattern and a Fibonacci retracement analysis, according to Reuters analyst Wang Tao.
March white sugar on Liffe fell $0.70 or 0.1 percent to $520.20 per tonne.
Cocoa was slightly lower with May futures on Liffe off 10 pounds or 0.7 percent at 1,509 pounds a tonne.
Dealers said light origin selling this week had exerted some downward pressure on prices although there had been scale down buying by trade and industry.
"Whether or not we're going to break below the range and force weak longs out, it's a distinct possibility," said a London-based broker.
March cocoa futures on ICE were off $10 or 0.4 percent at $2,387 a tonne.
(Editing by Alison Birrane and Helen Massy-Beresford)