Robusta Coffee tumble on heavy producer Selling, Arabica Coffee Futures Slid

Robusta coffee on Liffe also tumbled on heavy producer selling while cocoa gave back the previous session's gains, joining a retreat in crude oil and many other commodity markets as investors eyed slowing growth in China and Europe.

May robusta coffee contract on Liffe dropped $64, or 3.1 percent, to close at $1,986 per tonne.

Dealers said Vietnam, the world's largest robusta producer, could unload more beans to the physical market this week on worries that London futures may fall further because of the prospect of a record global crop.

May's premium to July weakened to close at $15, down from $46 at the close on Friday. Flury said while coffee prices could fall further in the short-term, the frost season could give the market a boost.

Arabica coffee futures slid to a 17-month low on Monday, extending a prolonged downward trend after marking its weakest week in nearly six months, on origin selling and long liquidation, while raw sugar moved up after a one-month low.

May arabica futures fell 1.35 cents, or by 0.7 percent, to finish at $1.8485 a lb, the lowest close for the second position since October 2010. "Everyone's selling. Central America I believe has been in the market. Brazil's been in the market," said Nick Gentile, chief trader for commodity firm Atlantic Capital Advisors in New Jersey. "The trend-following funds are selling."

Arabica coffee prices on ICE have fallen around 40 percent from peaks hit in May 2011 as prospects of a global surplus in 2012/13 eased concerns about supply tightness and dented investor appetite for the commodity. Last week, the benchmark second-position contract tumbled below the 61.8 percent Fibonacci retracement level at roughly $2 per lb, attracting technically based long liquidation, dealers said.

"On expectations of that supply reducing prices, we've seen a lot of origin selling - Brazilians clearing space for their next crop as well as other ones trying to take advantage of $2 per lb arabica prices while they last," said Keith Flury, analyst at Rabobank.

"There was a little bit of a rush to the door to sell and that prompted technicals to look rather bearish, which probably brought in some speculators and spurred that on a little bit more," he added.

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