Coffee prices hit 2-1/2 week lows as supply prospects improve

LONDON, Oct 28 (Reuters) - Coffee futures on ICE hit 2-1/2 week lows on Wednesday as supply prospects improved and the Brazilian real currency remained weak overall after this weekend's surprise election result.

A weak real encourages mills, farmers and exporters in top sugar and coffee grower Brazil to sell dollar-priced commodity futures because it raises their returns in local currency terms.

COFFEE

* ICE arabica coffee futures fell 2.6% to $2.8605 per lb at 1243 GMT, having hit their lowest in 2-1/2 weeks at $2.8515.

* Dealers said the weak real continues to weigh on coffee, as the currency has not recovered much from Monday's 9% fall in the wake of President Luiz Inacio Lula da Silva's election win.

* Also, the weather in Brazil remains favourable for arabica, with above-normal moisture forecast across the main growing regions, said broker and consultant Michael J Nugent.

* Elsewhere, there are signs that the relentless drawdown in ICE-certified stocks might be moderating somewhat, with data showing just over 36,000 bags of coffee have arrived at exchange warehouses and are awaiting grading .

* Robusta coffee dipped 0.2% to $3,214 a metric ton, having hit its lowest since March 2024 on Monday.

* Robusta is under pressure overall as the harvest gets under way in top grower Vietnam and exchange stocks continue to rise.

SUGAR

* Raw sugar rose 0.7% to 19.34 cents per lb, recovering somewhat after Monday's 5.6% Brazil currency-driven selloff.

* "The (Brazil) currency move does not take away from the tightening supply outlook with poor crops in Europe, India and Brazil this year," said broker ADMIS.

* White sugar rose 0.6% to $522.40 a metric ton,

COCOA

* London cocoa fell 1% to £4,299 per ton.

* New York cocoa fell 1.3% to $5,504 a ton.