SOFTS-Arabicas hit 32-month low; sugar and cocoa dip
* Analyst sees further downside price risk in sugar
* Harmattan winds in W. Africa seen average
* Lack of producer selling due to Brazil, Vietnam holidays
(Adds trade comment, byline; updates prices)
LONDON, Feb 12 (Reuters) - ICE arabica coffee futures eased on Tuesday to the lowest level since June 2010 and raw sugar dipped, both pressured by expectations of big Brazilian crops.
ICE cocoa inched down to an 7-1/2-month low, weighed by favourable weather before mid-crop harvests in West Africa, the world's top cocoa growing region.
Second-month arabica coffee futures on ICE were down 0.8 cent or 0.56 percent to $1.4215 per lb at 1227 GMT after earlier touching a low of $1.4200 per lb, pressured by expectations of a huge "off-year" crop in top producer Brazil.
"There is meant to be an abundance of arabicas. People are playing the arbitrage with robustas. It is the Tet holiday in Vietnam, and people perceive that as a period when producers back away from the market," a coffee futures broker said.
May robusta coffee futures on Liffe eased $15, or 0.7 percent, to $2,083 a tonne, having hit a four-month high of $2,131 on Friday.
The spread between ICE arabica and Liffe robusta <KC-LRC1=R> traded near a four-year low, which was reached on Friday as robustas climbed. It edged up to around 45.97 cents a lb on Tuesday, from the low of 43.3 cents on Friday.
March raw sugar futures on ICE were down 0.21 cent or 1.14 percent at 18.23 cents a lb. They were still near the 2-1/2-year low of 18.03 cents per lb touched on Friday.
ICE raw sugar futures were underpinned by a lack of Brazilian producer selling due to the Carnival holiday in the world's top sugar producing country, dealers said.
Christoph Berg, a senior analyst with F.O. Licht, said he saw downside price risk in sugar as the huge Brazilian 2013/14 cane crop was expected to outweigh recent favourable government incentives for the ethanol industry.
"There will possibly be more downside pressure in sugar," Berg said.
Moves to increase the ethanol blend in fuel and to raise gasoline prices in Brazil have bolstered prospects for the domestic ethanol industry.
Some dealers said expectations of a bigger allocation from Brazilian cane to ethanol next season could support sugar prices.
"I don't think the bullish news with regard to ethanol prices will affect the sugar market that much, because of the big cane production," Berg said.
March white sugar on Liffe was down $2.20 or 0.45 percent at $486.30 a tonne in moderate volume of 2,451 lots.
Traders anticipated a modest delivery against expiry of the March white sugar contract on Wednesday.
"The situation vis-a-vis March London, expiring tomorrow, is still unclear," Nick Penney of brokerage Sucden Financial said.
"The main sugars expected to be delivered are Central American and some Argentine," he added.
"We foresee a low delivery this time around."
Another factor supporting sugar prices was concerns over dry weather in number 2 producer India.
India's sugar production for the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states.
May cocoa on Liffe was down 7 pounds or 0.49 percent at 1,416 pounds ($2,200) a tonne in moderate volume of 2,608 lots.
Dealers said upside was capped by good supply prospects in West Africa and an anticipated backlog of origin forward sales. Ivory Coast is the world's top cocoa producer.
"There is still the perception that there is still cocoa to be sold sitting above the market," one London-based cocoa futures broker said.
He referred to average seasonal harmattan winds in West Africa, noting that there were no concerns over weather at present.
May cocoa futures on ICE were down $18 or 0.83 percent at $2,154 a tonne in slim turnover of 2,986 lots. ($1 = 0.6385 British pounds)
(Reporting by David Brough; editing by James Jukwey and Jane Baird)