Arabica-Coffee Futures Climb Above 2-Month High; Sugar Sinks

  NEW YORK  -  Arabica-coffee prices rose to the highest level in more than two months on Wednesday as

traders saw demand for the beans picking up.

  Arabica coffee for delivery in March on the ICE Futures U.S. exchange gained 1.6% to end at

$1.1595 a pound, the highest settlement for the most actively traded contract since Oct. 15.

  "We've been seeing more (buying) interest from exporters," said Thiago Cazarini, founder of coffee

brokerage Cazarini Trading Company, based in Varginha, Brazil.

  Stockpiles of green, or unroasted, coffee in the U.S. fell 2% last month to 5.088 million

60-kilogram bags, according to the Green Coffee Association, a trade group. It was the third

consecutive month of drawdowns on stockpiles.

  Lackluster demand and back-to-back bumper crops from top grower Brazil helped push arabica-coffee

prices to a seven-year low. Unless demand improves further, prices could fall again, Mr. Cazarini

said.

"It's still a quiet market," he said.

  Raw-sugar futures fell to the lowest point since June 29, 2010, as heavy global supplies continued

to weigh on the market. Prices have fallen for seven of the last 10 sessions, and the contract for

March delivery lost 0.4% to end at 15.89 cents a pound.

  Futures of frozen orange-juice concentrate for March delivery ended 0.05 cent lower at $1.4380 a

pound. Cocoa for March fell $1 to settle at $2,770 a ton.

Cotton for delivery in March ended 0.05 cent higher at 83 cents a pound.

Coffee Futures Fall a Tad, But Decline Slows -- Market Talk

Robusta coffee futures fall in Europe, although the sharp decline posted in

the previous session has stalled. The Liffe January robusta coffee futures contract is presently

down 0.2% at $1,715/tonne. "The recent rally was ultimately a short squeeze accentuated by low

certified stockpiles and delays from Vietnam, all being compounded by steady premium differentials

and a lack of incentive for bringing coffee to the terminal," says Toby Donovan at BGC Partners LLP.

"Given yesterday's negative action observed in both markets, we ponder the prospect of further

retracements for both. Whilst one-way traffic is rarely the case, we feel a negative bias is

probably fair all being considered on respective flat price."

Indonesian regulator approves two commodity contracts, more to follow

Dec 18 (Reuters) - The Jakarta Futures Exchange (JFX) has received government backing to launch coffee and rubber futures contracts, a regulatory official said on Wednesday, as Indonesia moves to secure itself a bigger role in pricing commodities.

Indonesia is the world's biggest exporter of refined tin, nickel ore and thermal coal, the biggest grower of palm and the second-largest producer of rubber and robusta.

In recent years Southeast Asia's largest economy has launched several commodity contracts, with limited success due to a failure to attract liquidity. But an Aug. 30 rule forcing tin producers to trade on a domestic exchange before shipping could change this.

"COFTRA will boost commodity futures trading at local exchanges in an effort to create price references locally and to provide services for commodity business people in hedging their commodities," Sutriono Edi, head of Indonesia's Commodity Futures Trading Regulatory Agency (COFTRA) told Reuters.

"For this we have approved two new commodity contracts -- coffee and rubber -- to be traded on the Jakarta Futures Exchange," he added.

"Hopefully we will also approve a coal contract early next year for the JFX."

To ensure domestic supplies and boost downstream industries, Indonesia sets a monthly export tax for cocoa beans and crude palm oil, calculated on the basis of both domestic and international prices.

Edi reiterated the agency's commitment to approve only one exchange for each commodity, citing the Indonesia Commodity & Derivatives Exchange's (ICDX) physical tin contract.

"It will be difficult to take a price reference if there are two exchanges or more that trade the same contract," he added. "ICDX will keep trading tin because it has been successful ... both in volume and price, which keep increasing."

The ICDX plans to build on its physical tin contract by next year offering tin futures it hopes could help win trade from the London Metal Exchange.