London, June 25 - Robusta coffee futures on Liffe fell sharply on Thursday as investor selling triggered stops while raw sugar on ICE rose with July particularly strong ahead of next week's expiry, dealers said.
Cocoa prices were lower, weighed partly by favourable crop prospects in the key producing area, West Africa.
Robusta coffee futures have fallen about $300 per tonne, or nearly 20 percent, in the past two weeks, weighed both by overall weakness in the coffee market and bearish fundamentals for robustas with supplies currently outstripping demand.
London's September robusta contract <LRCU9 was down $48 to $1,277 per tonne at 1233 GMT, having touched a contract low of $1,250 earlier. New York's September arabica contract fell 0.80 cent to $1.1835 cents per lb.
"There is definitely a little bit of speculative long liquidation going on and I think trade and origin sell-stops were triggered on the way down," one dealer said.
CoffeeNetwork has forecast a second successive global surplus for robusta coffee in 2009/10 for the first time since the 2001/02 and 2002/03 seasons.
Analyst Andrea Thompson said, however, the market could move into balance, or even deficit, if heavier than normal rains reduce crop prospects in top robusta producer Vietnam.
"A weather event can tip the balance one way or the other," she said in a report received by Reuters on Thursday.
Raw sugar futures were higher, boosted by talk that a major trade house was keen to take delivery of sugar on the expiry of the July contract next week.
SOUTH ASIA DEMAND
"They (the trade house) seem to be quite confident they have got homes (for July sugar)," one dealer said, adding the sugar was likely to end up in South Asia.
July raws rose 0.23 cent to 16.17 cents a lb with October up 0.16 cent at 17.29 cents.
Dealers said the market has also derived support from concerns that delays to the Indian monsoon could reduce sugar yields in the world's top consumer while higher crude oil prices added further strength to the market.
They noted the rise in prices during the last few days had slowed demand in the physical market.
"At the beginning of the week when we were down below 16 cents on October there were a few bits of business being done but the last couple of days it (the physical market) has gone quiet," one dealer said.
White sugar futures in London lagged raws with August off $1.40 at $446.40 a tonne.
Cocoa futures were lower with a firmer dollar adding to downward pressure on ICE, dealers said.
Dealers said industry buying helped to underpin prices in London which found support at a six-month low of 1,578 pounds for the second position set on Monday.
Dealers said the market may remain on the defensive with crop prospects in West Africa generally favourable.
"The big macro picture was solely responsible for the rally we saw recently and we've more or less given it all back now," one dealer said.
"Crop development on balance is quite good. Fundamentals are probably neutral to slightly negative at these sort of levels," the dealer added.
September cocoa in London were down 10 pounds at 1,580 pounds after equalling Monday's low of 1,578 pounds. September cocoa on ICE were off $55 at $2,449 a tonne.