(Corrects settlement price of May raw sugar futures to 14.32 cents a lb instead of 14.39 cents a lb, paragraph 5)
* Sugar focus turning toward March raws expiry next week
* Arabica coffee premium over robustas at 1-year low
* Arabica EFP volume jumps
By Marcy Nicholson and Nigel Hunt
NEW YORK/LONDON, Feb 20 (Reuters) - Raw sugar futures on ICE dropped more than 2 percent to the lowest in nearly five years on Friday, falling for the third straight day on chart-based selling, while arabica coffee hit a one-year low.
London cocoa futures rose to a five-week high.
Raw sugar futures extended this week’s steep losses, attracting technical sellers below the prior session’s while India’s decision to offer export incentives to mills continued to pressure prices, traders said.
“You’ll probably find a lot of these producers now churning out raws instead of whites so they can export them, but this price won’t be helping,” said James Liddiard, senior vice president of Agrilion in New York.
The most-active May raw sugar futures closed down 0.32 cent, or 2.2 percent, at 14.32 cents a lb, after falling 2.7 percent to 14.25 cents, the lowest since May 2010.
Traders focused on the approaching expiry of the March raw sugar contract on Feb. 27.
March white sugar futures closed down $6.30, or 1.6 percent, at $381, after falling to a contract low at $379.10.
Arabica turned higher late in the session on short-covering after a day marked by profit-taking, traders said.
“Fundamentally you could say the market should not go much lower. Technically the market looks very bad,” said Rodrigo Costa, director of coffee for Societe Generale in New York.
May arabica coffee closed up 0.25 cent, or 0.2 percent, at $1.5290 per lb after creeping down to a one-year low of $1.5085. The contract closed the week down 8.2 percent, the biggest weekly drop since October 2014.
Exchange For Physical (EFP) volume in the May contract surged to 3,592 contracts, after 5,500 lots of EFPs dealt in the March contract on Wednesday, the day before its first notice day.
Many traders speculated about the larger-than-usual volume, but one said a trade house with financing needs had driven up activity. A total of 1,908 lots were thought to represent coffee that was delivered, the trader said.
May robusta coffee settled down $16, or 0.8 percent, at $1,974 a tonne. Arabica’s premium over robusta KC-LRC2=R fell as low as 61.13 cents per lb, the lowest in a year.
May New York cocoa futures on ICE ended up $4, or 0.1 percent, at $2,979 a tonne while May London cocoa rose 16 pounds, or 0.8 percent, at 2,015 pounds a tonne, after tapping 2,019, the highest on a continuation chart since Jan. 15. (Editing by Jason Neely and Tom Brown)