SOFTS-Cocoa rises sharply, sugar down before US tariff reversal

NEW YORK, April 9 (Reuters) - Cocoa prices rose sharply on ICE on Wednesday, with dealers citing a technical recovery amid oversold signals after the market hit its lowest levels in five months earlier in the session.

Coffee prices ended little changed after earlier hitting multi-month lows as well, while raw sugar hit a one-month low.

The announcement that the United States government was pausing most of the higher import tariffs for 90 days came as trading sessions were ending, failing to strongly impact prices on Wednesday.

U.S. President Donald Trump said he would temporarily lower new tariffs on many countries, even as he raised them further on imports from China, in a sudden reversal that sent U.S. stocks sharply higher.

The move offers temporary relief on the ongoing trade war that has raised fears of a global recession with impacts to the physical trade of commodities.

The tariffs had hinted at the prospect of even higher prices for products like coffee and cocoa, which had already gone up sharply in the last months because of global production issues.

"In our view, the bull market (in coffee) is likely over unless a fresh fundamental catalyst — such as a frost — emerges. The breathless headlines about tariffs will likely continue," said broker and consultant Michael J Nugent.

He said that cash-strapped, demoralised consumers were already set, pre-tariffs, to tighten their belts as the blistering rally that sent coffee prices to record levels got passed down to them.

The fresh tariff pause announcement, however, did not include a 10% duty on almost all U.S. imports, which will remain in place.

Robusta coffee futures LRCc2 settled up $3, or 0.1%, at $4,797 a metric ton, having hit their lowest in more than four months at $4,608. Arabica coffee KCc2 fell 0.3% to $3.417 per lb, having touched its lowest in more than two months.

Arabica futures rose by as much as 3% in after-market trading, when the market became aware of the latest tariff move.

London cocoa LCCc2 hit a five-month low of 5,612 pounds per ton, but later recovered sharply to close 5.5% up to 6,096 pounds a ton. The market still finds some support from fears over poor prospects for the upcoming mid-crop in top grower Ivory Coast.

New York cocoa CCc1 hit its lowest in five months at $7,613 a ton but closed up 7.7% to $8,317 a ton.

Data on the first-quarter cocoa grind, a measure of demand, in Asia, Europe and North America will be released next week.

In other traded soft commodities, raw sugar SBc1 ​settled down 0.4 cent, or 2.2%, at 17.91 cents per lb, having hit a one-month low of 17.87 cents, while white sugar LSUc1 fell 1.9% at $513.30 a ton.