(Recasts throughout, updates prices; adds market activity, comments, NEW YORK dateline) NEW YORK/LONDON, March 27 (Reuters) - Arabica coffee futures on ICE fell on Wednesday as the currency of top grower Brazil softened to its weakest levels against the dollar this year, while cocoa prices rose. COFFEE * May arabica coffee settled down 1.5 cents, or 1.6 percent, at 93.85 cents per lb, drifting back toward a contract low of 92.60 cents set on Monday. * Prices, which have collapsed on excess global supplies, were dragged lower by a weaker Brazilian real, dealers said. A weaker Brazilian currency can encourage producer selling of commodities priced in dollars, such as coffee. * The Brazilian real hit a fresh year-to-date low, trading weaker than 3.95 per dollar for the first time in 2019. Brazilian financial markets tumbled after a measure to seize more control over the federal budget received near-unanimous approval by the country's lower house of Congress. * "The Brazil real alone will continue to dictate market direction for the foreseeable future, subject to any sudden moves by funds, which is unlikely," said Darren Stetzel, commodity broker at INTL FCStone in Singapore. * Rabobank increased its forecast for a global coffee deficit in 2019-20 to 2.3 million 60 kilogram bags, from a previously estimated 1.2 million, citing reduced production in several key countries. * Global coffee growers are being forced into poverty by low international prices, farmers' representatives said at an international conference, warning the future of the industry is at risk. * May robusta coffee settled down $6, or 0.4 percent, at $1,504 per tonne. COCOA * May New York cocoa settled up $11, or 0.5 percent, at $2,248 per tonne, its fourth straight positive finish. * The May-July spreadsettled at a $2 premium. The spread inverted to a premium on Tuesday as some market participants rolled their positions forward. * Prices are unlikely to move higher to break out of their recent range "unless we get a big boost in global demand, like with the Asian grind data," said Peter Mooses, senior market strategist at RJO Futures. * May London cocoa settled up 4 pounds, or 0.2 percent, at 1,691 pounds per tonne. SUGAR * May raw sugar settled down 0.01 cent, or 0.1 percent, at 12.58 cents per lb. * S&P Global Platts said it had cut its forecast for the size of an anticipated global sugar deficit in the 2019-20 (October-September) season by 400,000 tonnes to 1.93 million tonnes. * "Demand now looks set to grow more sluggishly than previously assumed," Commerzbank said in a market note that referred to the revised forecast. * May white sugar settled down $1.50, or nearly 0.5 percent, at $330.10 per tonne. (Reporting by Ayenat Mersie in New York and Nigel Hunt in London; editing by Louise Heavens and G Crosse)
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