SOFTS-Coffee, sugar climb as industry, funds buy

* Industry buying, origin selling in robusta coffee

* Sugar prices advance despite decline in crude oil

* Coffee, sugar climb as discretionary funds buy

NEW YORK/LONDON, Jan 9 (Reuters) - Coffee futures rallied on Friday as industry and fund buying lifted prices higher, while sugar also climbed on the interest despite a stronger U.S. dollar and weaker crude oil market.

Dealers said coffee market fundamentals appeared constructive and that the market had resiliently absorbed selling in fund re-weightings. Raw sugar, however, felt the weight of index fund selling late in the session.

"Some new money's coming into the market and the open interest has shown some interest. It's light, nothing big," said Rodrigo Costa, vice-president Institutional Sales for Newedge USA in New York.

"We're suppose to see it a little bit lower because of the (firm) dollar but it seems that a lot of the money that was on the sidelines is, little by little, flowing," Costa said.

ICE March arabica coffee futures rose 3.45 cents or 3 percent to finish at $1.1690 per lb, after hitting a two-month high at $1.1950. London March robustas settled $53 higher at $1,700 per tonne.

"Industry buying is coming into London, and all the technical charts suggest higher levels. The market has taken the index (fund) selling well," one dealer said.

Sugar futures also rose despite a sharp fall in crude oil, with raw sugar pressured by late-day index fund re-weightings.

ICE March raw sugar futures closed up 0.02 cent at 12.05 cents per lb, well below the session high at 12.36 cents. London March white sugar settled $2.20 higher at $339.10 per tonne.

"Sugar has been remarkably strong despite the weakness of crude," Nick Hungate, soft commodities trader with Rabobank, said earlier. "Short covering is somehow outweighing the index rebalancing."

U.S. cocoa futures fell, pressured by the stronger dollar and after failing to gather enough momentum to make a new high, dragging down the London market.

ICE March cocoa futures were down $31 to finish at $2,585 per tonne, while London May cocoa ended down 24 pounds at 1,764 pounds per tonne.

Slow bean arrivals at ports in the main West African producers have helped underpin cocoa futures in recent months.

The London cocoa futures market surged 66 percent in 2008, supported by the slow bean arrivals which signaled supply tightness, and by a weak pound. U.S. cocoa ended 2008 up 31 percent, year over year
source:forexpros