March 29, 2016 / 7:38 PM / in 4 years

SOFTS-ICE sugar, arabica coffee retreat under currency pressure

* Brazilian real falls against the greenback

* Licht sees sharp drop in global sugar output in 2015/16 (New throughout with updated prices, comment; adds byline, NEW YORK dateline)

By Chris Prentice and David Brough

NEW YORK/LONDON, March 29 (Reuters) - ICE sugar futures eased on Tuesday, retreating further from 17-month highs as arabica coffee futures also fell, both under pressure from gyrations of the Brazilian real.

Cocoa futures in New York were unchanged. London soft commodities market reopened after the Easter Monday holiday.

The commodities complex was broadly down, with most of the 19 components of the bellwether Thomson Reuters/Core Commodity CRB lower.

The Brazilian real retreated against the U.S. dollar, pressuring sugar and arabica coffee prices. The dollar’s gains boost the incentive for Brazilian exporters to sell greenback-traded commodities in the world’s largest producer of both arabica and sugar.

The benchmark May raw sugar contract on ICE Futures U.S. settled down 0.08 cent, or 0.5 percent, at 15.86 cents per lb.

“It’s all about currency,” said Jack Scoville, a vice president with Price Futures Group in Chicago. “We were up with (the real) yesterday, and we’re giving it back today.”

Buyers including cane refiners clung to the sidelines, unwilling to chase the market higher, which added to the pressure.

The front-month ran up to a 17-month high last week on support from downward revisions to crops in big producers such as India and Thailand due to dry weather.

Analyst F.O. Licht forecast a drop of 13.3 million tonnes in global sugar output to 171.1 million tonnes in 2015/16 on lower Asian output.

Investors have piled into sugar on expectations of a supply deficit emerging this year, driving prices into technically overbought territory. Selling in the last three sessions has brought the front-month’s 14-day Relative Strength Index back under 70, no longer overbought.

ICE May white sugar eased $1.2, or 0.3 percent, to finish at $453.20 per tonne.

“The real has stopped appreciating, which has caused quite a bit of producer selling of arabicas,” said Carlos Mera, commodity analyst with Rabobank.

ICE May arabica coffee closed down 1.1 cent, or 0.9 percent, at $1.2745 per lb, falling further from last week’s five-month high of $1.364.

ICE May robusta coffee settled up $5, or 0.3 percent, at $1,496 per tonne despite expectations of higher exports from top grower Vietnam.

Vietnam will export an estimated 160,000 tonnes (2.67 million 60-kg bags) of coffee in March, up 18.8 percent from a year earlier, the government said on Friday.

ICE May New York cocoa finished unchanged at $2,970 per tonne.

ICE July London cocoa closed down 12 pounds, or 0.55 percent, at 2,185 pounds per tonne, pressured by the pound’s advance against the dollar. (Editing by Susan Thomas, Dale Hudson and Diane Craft)

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