Arabica coffee steadies but trade jittery about Brazil frost risk

Arabica coffee futures on ICE steadied on Tuesday after closing up 5% in the previous session, but the downside was limited as investors remain jittery about frost risk in top producer Brazil this season.

July arabica coffee KCc2 was down 0.2% to $2.2425 per lb at 1214 GMT, after hitting a three-week high of $2.2620 on Monday.

Farm areas in Brazil's center-south may be hit by light frosts in coming days, raising concern about corn, coffee and sugarcane crops.

Although many forecasters say it is too early in the season for frost damage to occur, dealers said the market fears frost risk this season is not fully priced in at present.

"The consequences of frost are massive. (Even) a temperature of +2C can damage the coffee plant if the cold persists over multiple instances," said a dealer.

July robusta coffee LRCc2 rose 0.3% to $2,093 a tonne.