SOFTS-Sugar, coffee reverse losses as dollar weakens

* Index fund buying supports coffee - trade

* Heavy 2009/10 Indian imports to underpin sugar

LONDON, Nov 5 - Sugar and coffee futures on ICE reversed early losses on Thursday, as the dollar lost ground against a basket of currencies, while cocoa dipped in light trade with the focus on new crop arrivals at West African ports.

Sugar futures fell at the opening and later clawed higher, with the market focused on the impact of heavy rainfall in Brazil on yields, and on India's substantial import requirements in marketing year 2009/10.

"One could expect to see further support around the low 23.00 cents/lb area, where the 10 and 20-day moving averages are situated, but sell stops may well be lingering just below the 23.00 level," wrote David Sadler in Sucden's market report.

Dealers and analysts see firm support to sugar futures in the near term, largely due to expectations of strong import requirements by India, the world's top consumer of the sweetener, in 2009/10, possibly around 6-7 million tonnes.

ICE March raw sugar futures reversed early losses to stand up 0.29 cent to 23.88 cents per lb at 1247 GMT, while London December white sugar was up $6.2 to $597.90 per tonne in low turnover of 1,052 lots.

Cocoa futures fell on light investor selling pressured by the firm dollar, and a stronger pound weighed on sterling-denominated London (Liffe) cocoa futures, dealers said.

In cocoa, the market focused on a steady flow of new crop beans to ports in West Africa, the main growing region.

ICE December cocoa futures were down $2 to $3,270 per tonne, while London March cocoa was down 10 pounds to 2,170 pounds per tonne in low volume of 530 lots.

Arabica coffee found support from a strong interest in the commodity from index funds, futures dealers said.

"In the last 212 days, arabica coffee has moved in the direction of the dollar for 71 days which is about 33.5 percent of the days while against it for 66.5 percent of the days," said Raghu Ramachandran, a commodities analyst with Rabobank.

"So much talk about the dollar-commodity linkages!"

Traders focused on the impact of heavy and persistent rains in Brazil in September and October on the flowering of the next coffee crop.

ICE December arabica coffee futures were up 1.55 cent to $1.4230 per lb, while London (Liffe) January robustas were up $6 to $1,453 per tonne in slim volume of 794 lots.