Coffee prices suffered a modest setback on Wednesday after the prior session's surge to a two-year high, with a general reduction in the risk appetite of investors prompting some to take profits.

Prices have almost doubled this year as dry weather in top producer Brazil reduced the prospects for the upcoming 2014/15 crop and led to forecasts that there would be a global deficit for the first time in several seasons.

May arabica coffee futures on ICE were off 1.55 cents or 0.75 percent at $2.0410 per lb by 1043 GMT. The contract peaked at $2.0890 on Tuesday, the highest level for the benchmark second position since February 2012.

Investors' risk appetite has been diminished by increased concern about China's economic slowdown and prices for non-agricultural commodities such as copper have fallen sharply.

"The story about China is one that agricultural markets have so far managed to escape but anything which nearly doubles in price in a short period of time, there will be a time for reflection sooner or later," Saxo Bank's head of commodity strategy, Ole Hansen, said.

"With this kind of risk aversion in general we are seeing at the moment there could just be the temptation to book some profits," he added.

Robusta coffee futures on Liffe were lower, with May off $18 or 0.8 percent at $2,162 a tonne. The second position peaked at $2,195 on Tuesday, a one-year high.

Vietnam's robusta prices advanced more than 1.4 percent to 41,700 dong ($1.98) per kg on Wednesday, the highest since May last year, traders said.

SUGAR SETBACK

Sugar prices also suffered a setback with May raws on ICE down 0.16 cent, or 0.9 percent, at 17.87 cents a lb.

The market started to climb in late January as dry weather diminished prospects for Brazil's next cane crop. The May contract hit a peak on March 6 of 18.47 cents, a four-month high for the front month.

"We recognise that raw sugar is likely to experience a (downward) price correction while white sugar is currently experiencing a price correction," Phillip Futures said in a market update on Wednesday.

"Despite this, both raw sugar and white sugar are likely to continue on their respective uptrends," the report added, noting support was pegged at 16.40 cents a lb.

May white sugar futures on Liffe fell $3.10 or 0.7 percent to $467.50 a tonne.

Brazil's main centre-south sugarcane crop will fall to less than 577 million tonnes in the April-March season, indicative of an expected drop in yields below earlier projections, local analysts Canaplan said on Tuesday.

On Monday, competing analysts Archer Consulting put out their first estimate of the new crop at 590 million tonnes, 1 percent lower than the current crop, which officially ends this month but finished crushing in early January.

Cocoa futures on ICE were also lower with May down $17 or 0.6 percent at $2,989 a tonne after climbing to a peak of $3,027 on Tuesday, a 2-1/2-year high.

Hansen said speculators would remain comfortable with the current large net long position as long as prices held above key support around $2,900.

"That will be a level where there will be quite a few handbrakes pulled, but until we see that level those who have been enjoying the ride will not be considering changing too much," he said.

May cocoa on Liffe stood 1 pound or 0.05 percent lower at 1,877 pounds a tonne.