SOFTS-Coffee rises on weak dollar, sugar stalls

* India seen needing additional sugar imports

* Colombia coffee regions much drier than normal

LONDON, Nov 4 - Coffee and cocoa futures on ICE rose on Wednesday, supported by a weaker dollar while raw sugar fell back slightly after testing but initially failing to breach a key resistance level.

Dealers noted raw sugar futures on ICE have climbed sharply during the last week and the run-up stalled at the key 24.00 cent a lb level on the March contract.

The rise has been driven partly by strong domestic prices in India which has sparked some imports and could lead to further purchases, they added.

India will consume up to 7 million tonnes more sugar than it will produce in 2009/10, and the imported raw sugar being processed in the new season will not be enough to bridge the deficit, Farm Minister Sharad Pawar said.

"I think the backdrop is still bullish and I think the market has taken note of what is happening in India," said Standard Chartered analyst Abah Ofon.

March raw sugar on ICE were off 0.10 cent at 23.86 cents a lb at 1338 GMT after trading as high as 24.00 cents earlier in the session.

"We have seen several attempts at the 24.00 cent level but so far this has not been broken," sugar trader David Sadler of Sucden wrote in a daily market update on Wednesday.

"The dollar again looks quite weak so further advances should be seen but there is doubt this will encourage physical offtake," he added.

DOLLAR DECLINE

The dollar fell broadly on Wednesday as firmer equity and commodity prices buoyed demand for the euro and perceived riskier currencies, while traders braced for a policy decision from the Federal Reserve.

December white sugar in London stood $1.20 higher at $595.00 a tonne.

Coffee futures were higher, supported by the dollar and supply issues in Colombia and Vietnam.

Colombian coffee regions reported scarce rainfall in October as the El Nino weather phenomenon hit and some key areas registered nearly half the rain they usually receive, the National Coffee Research Center (Cenicafe) said.

Dealers also noted disruptions of the harvest in top robusta Vietnam caused by heavy rains linked to a typhoon.

"I'm sure some support is coming in from (harvesting disruptions in) Vietnam," Ofon of Standard Chartered said.

December arabica coffee on ICE rose 1.10 cents to $1.4220 per lb while January robustas in London edged up $10 to $1,462 a tonne.

Cocoa futures on ICE advanced while sterling-denominated London futures trailed as the pound rose against the dollar.

December cocoa on ICE rose $7 to $3,281 a tonne while March cocoa in London fell 3 pounds to 2,174 pounds a tonne.

Dealers said the cocoa market may struggle to rise much further given strong early arrivals figures in top grower Ivory Coast.

"I'm not convinced the fundamental story on cocoa is an entirely bullish one," Ofon said, noting the arrivals data and the need for more evidence that demand has recovered after a downturn linked to the global economic crisis.