SOFTS-ICE sugar hits 2-1/2 year low, coffee, cocoa also fall
* Sugar set for fourth consecutive global surplus in 2013/14
* Colombian coffee growers block roads, demand more aid
* Origin selling helps to drive down cocoa prices
(Adds quotes, updates prices)
LONDON, Feb 26 (Reuters) - ICE raw sugar futures fell to a 2-1/2 year low on Tuesday with weakness in commodity and many other financial markets following Italy's inconclusive election result giving added impetus to a decline mainly driven by excess supplies.
Arabica coffee and cocoa prices on ICE also fell.
March raw sugar futures on ICE were off 0.19 cent or 1.1 percent at 17.82 cents per lb at 1123 GMT, after hitting 17.80 cents a lb, the lowest level for the front month contract since August 2010.
Prices have fallen by 50 percent in the last two years driven down by rising stocks with a third consecutive global surplus widely anticipated in 2012/13 and early signs pointing to a fourth surplus in 2013/14.
"The market environment is not very good, but most of it is rather fundamentals on the sugar market itself. The huge surpluses are still weighing on the prices," Commerzbank analyst Michaela Kuhl said.
"Looking at 2013/2014, there is a huge probability of another surplus, although not as huge as it will be this season," she added.
Kuhl, however, expected the market to derive support from an expected switch in cane use in Brazil towards ethanol and away from sugar while there was scope for speculators to cover a large net short position if sentiment improved.
"We think the prospect of a large ethanol production, not only in Brazil but elsewhere as well, is underestimated at the moment. We think that should be a factor which should support prices in the medium term," she said.
Dealers noted front month March had slipped to a discount of about 10 to 12 points to May <SB-1=R> compared with a premium of as much as 30 points last week, indicating there appears to be little appetite to take delivery when it expires on Thursday.
May white sugar on Liffe eased $1.40 or 0.3 percent at $504.10 a tonne.
Arabica coffee futures on ICE were lower with May off 1.70 cents or 1.2 percent at $1.4140 per lb as the market moved back down towards a more than 2-1/2 year low of $1.3760 per lb set last week.
The market is also struggling to absorb surplus supplies following a large crop in top grower Brazil last year and a generally favourable outlook for the 2013/14 harvest.
Speculators have built up a record net short position during the market's prolonged decline.
"I can't see any reason for this market to move out of the 1.30-1.50 (dollars per lb) range, the only thing that could be a life line for a rally is the large speculative short position," a London-based broker said.
Thousands of Colombian coffee growers blocked roads and prevented beans from getting to port on Monday on the first day of a strike to demand more government aid after being hit by years of poor weather, crop disease and a strong currency.
Robusta coffee futures on Liffe were lower with May off $9 or 0.4 percent at $2,070 a tonne.
Dealers said a sharp slowdown in shipments from top robusta producer Vietnam this month failed to provide much support for prices.
"There's a little bit of concern that exports dropped off sharply in February in Vietnam but it just means they shipped it out sharpish - they front loaded it," said the broker.
Vietnam's coffee exports during January had been well above year earlier levels.
Cocoa futures were lower, weighed by origin selling and an improving outlook for the mid-crop in top grower Ivory Coast.
"Cocoa has steady origin selling pressure from Ivory Coast," said a London-based broker.
May cocoa futures on ICE fell $21 or 1.0 percent to $2,122 a tonne.
Ivory Coast's main cocoa regions received abundant rainfall and sunshine last week, ending months of dry weather and improving the outlook for the upcoming mid-crop harvest, farmers and analysts said on Monday.
May cocoa on Liffe fell 17 pounds or 1.2 percent to 1,426 pounds a tonne.
(Additional reporting by Sarah McFarlane; editing by James Jukwey)