SOFTS-Cocoa futures fall to multi-month lows, sugar, coffee gain

* Cocoa trade sees ample West Africa mid crop production

* ICE raw sugar seen trading near 18.0 cts/lb in near term

* Arabicas market avoids coffee leaf rust in Centam

(New story, updates prices; adds byline, dateline)

NEW YORK/LONDON, March 4 (Reuters) - Cocoa futures fell to multi-month lows on Monday as favorable weather in West Africa and expectations of bigger crops pressured prices, while ICE raw sugar and arabica coffee futures rose from recent multi-year lows.

Abundant rainfall in principal growing regions of Ivory Coast bodes well for a robust mid-crop that may help compensate for poor weather earlier in the season and has boosted crop expectations for the world's top producer.

May cocoa futures on ICE Futures U.S. sank $26, or 1.2 percent, to settle at $2,056 per tonne, after earlier falling to $2,053, the lowest price for the second-month contract since June 2012.

"Favorable weather in Ivory Coast, and a general lack of problems in most growing areas, is weighing on the cocoa market, and there's some nervousness about European demand down the road," said Sterling Smith, futures specialist with Citigroup in Chicago, citing a recent concerns over economic stability and growth in the euro zone.

May cocoa on Liffe dropped 18 pounds, or 1.3 percent, to close at 1,388 pounds a tonne, finishing just above a session low of 1,386 pounds and the lowest price for the second-month contract since April 2012.

"The West African crops will be pretty good, and we might need to focus on the 2013/14 main crops before we see support for cocoa," said Keith Flury, a senior soft commodities analyst with Rabobank.

While total volumes for the 2012/13 season remain below last year's levels, the forecasted deficit for the cocoa market is shrinking. Exporters estimated that about 16,000 tonnes of beans were delivered to Ivory Coast's two ports between Feb. 25 and March 3, about 6,000 tonnes more than the same week a year ago.

SUGAR, COFFEE RISE

May raw sugar rose 0.11 cent, or 0.6 percent, to 18.02 cents per lb at 1:07 p.m. EST (1801 GMT). The front-month contract dipped to 17.61 cents a lb on Thursday, the lowest level since August 2010.

"The market feels comfortable around 18 cents, with any movement below that resulting in short covering or destination buying," Rabobank's Flury said.

Sugar prices were supported by reports on Monday that Brazil, the world's number one producer, plans to exempt fuel ethanol from certain taxes.

The potential for Brazil to increase ethanol production "should afford sugar a little bit of stability, and provide a little bit of a boost at least," said Citigroup's Smith.

An increase in ethanol production could help deplete a global sugar surplus.

The government plans to exempt fuel ethanol from certain taxes that should be equivalent to 2 percent to 3 percent of the current pump price, government sources said.

The effect of the move would likely be to improve profit margins at mills.

Sugar prices have failed to register steep, sustained gains amid the Brazilian government's efforts to boost the country's ethanol industry, because the impact in reducing the global sugar surplus has yet to be seen.

On Friday, ICE raw sugar futures dropped the most in almost two months, close to Thursday's 2-1/2-year low.

"For right now, decent weather in Brazil has kept both coffee and sugar under pressure. There has been no follow through on negative performance on Friday, so we're stuck in this range," said Michael McDougall, a vice president with Newedge.

May white sugar on Liffe inched up $1.10, or 0.2 percent, to $515 a tonne.

ICE May arabica coffee rose 2.9 cents, or 2 percent, to $1.4625 per lb. The second-month contract touched $1.3760 on Feb. 19, its lowest price since June 2010.

Speculators are holding a large net short position in coffee futures and options contracts, which they recently trimmed down from record levels.

The market has been ripe for short-covering, said Citigroup's Smith. He also said that market is not yet willing to view the leaf disease roya, threatening Central American crops, as a real problem.

"As long as that continues the market is going to have a difficult time getting traction. With the shorts, there's fuel for a rally, but we need a spark," Smith said.

May robusta coffee futures on Liffe edged up $7, or 0.3 percent, to settle at $2,122 a tonne.

(Editing by James Jukwey and Grant McCool)