SOFTS-Arabica coffee hits 8-month high, sugar also up

* Robusta coffee lags arabicas as producers sell

* Cocoa prices in London ease as sterling strengthens

LONDON, May 22 - Arabica coffee rose to a fresh eight-month high on Friday, buoyed by crop problems in Colombia and Central America while a weaker dollar provided added support, dealers said.

Sugar prices also advanced on the back of a declining dollar while cocoa showed mixed trends with a firmer pound driving prices in London down towards a recent five-month low.

July arabica futures on ICE <KCN9 stood 1.20 cent firmer at $1.3690 per lb at 1202 GMT after touching $1.3740, the highest level for the front month in about eight months.

"We still have problems with Colombia's output. I think we can maybe reach $1.40 in the short-term. After that we will probably have some profit-taking because these are quite high levels," said Romain Lathiere, Swiss-based fund manager with Diapason Commodities Management.

Colombian coffee volumes were still lower than expected from the crop in the first half of 2009 while flowering for second half of the year was delayed by weather, the top exporters' group said Thursday.

Robusta coffee futures in London continued to lag behind the arabica market with producer selling keeping a lid on prices.

July robustas stood $1 lower at $1,538 a tonne.

The July arabica contract on ICE has risen 18 percent so far this month, easily outperforming July robustas which stand only around 6 percent higher.

A weak dollar also boosted soft commodity prices while firmer crude oil prices gave added support for sugar.

DOLLAR DECLINE

The dollar fell on Friday, hitting its lowest in five months against a basket of currencies as concerns about the U.S. sovereign rating accelerated a recent drive to move away from the greenback.

"I think the dollar is one reason the market is well supported," one London dealer said.

July raw sugar futures on ICE rose 0.15 cent to 15.77 cents per lb. The contract rose as high as 16.03 cents last week, the highest level for the front month since July 2006.

August whites in London rose $5.10 at $441.90 per tonne. Dealers digested news of an expected sharp jump in sugar stocks in the world's leading consumer India although they said it had little immediate market impact.

India's sugar stocks will jump to nearly 5 million tonnes at the start of the new season on Oct. 1, more than double the previous estimates, as mills have sealed deals to import 2.5 million tonnes of raws, the head of a leading trade body said. "Everyone knew about that kind of figure (for stocks). Now all the news about India, it is not surprising anymore," one dealer said.

Cocoa futures showed mixed trends with New York underpinned by a weaker dollar but London weighed by stronger sterling.

September cocoa in London stood 9 pounds lower at 1,593 pounds a tonne, holding just above a five-month low for the second month of 1,580 pounds set on Wednesday.

July cocoa on ICE edged up $3 to $2,383 a tonne.