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SOFTS-Arabica coffee erases gains after hitting 2-year high

* NY coffee pressured as investors flee to sidelines

* Benchmark ICE coffee climbs to $2.0975/lb during day's gyrations

* Canaplan forecasts Brazil CS sugarcane crop below 577 mln T

(New throughout, updates with closing prices; adds byline, NEW YORK dateline)

NEW YORK/LONDON, March 12 (Reuters) - New York coffee futures reversed course on Wednesday after setting a two-year high on weather-related concerns over output in top grower Brazil before edging lower as investors cut risk.

Raw sugar prices on ICE Futures U.S. fell the most in 1-1/2 weeks and New York cocoa futures tumbled the most since January.

Worries over growth in China, the top consumer of many raw materials and the world's second-largest economy, pressured equities and commodities markets. The Thomson Reuters/Core Commodity CRB index was down as energy and soft commodities markets sank.

Benchmark May arabica coffee contract on ICE withstood the pressure and clung to gains throughout much of the session on trade buying, dealers said.

The second-month ICE contract climbed to a two-year high of $2.0975 per lb before closing down 0.35 cent, or 0.2 percent, at $2.0530 per lb.

"The story about China is one that agricultural markets have so far managed to escape but anything which nearly doubles in price in a short period of time, there will be a time for reflection sooner or later," Saxo Bank's head of commodity strategy, Ole Hansen, said.

"With this kind of risk aversion in general we are seeing at the moment there could just be the temptation to book some profits," he added.

Coffee prices have almost doubled this year as dry weather in top producer Brazil reduced the prospects for the upcoming 2014/15 crop and led to forecasts that there would be a global deficit for the first time in several seasons.

Liffe May robusta coffee futures finished up $20, or 0.9 percent, at $2,200 a tonne, after climbing to $2,218, a May contract high and the strongest level for the second-month since October 2012.

Dealers said the market was supported by increased demand for robustas in the physical market following the recent sharp increase in its discount to arabicas.

The London coffee market has lagged arabica coffee's gains, propelling arabica's premium above $1 a lb and the highest levels since in two years this month.

Elsewhere, the front-month May ICE raw sugar contract dropped the most since the end of February, closing down 0.36 cent, nearly 2 percent, at 17.67 cents a lb.

"Sugar is getting hammered because of China concerns," said Jack Scoville, a vice president for Price Futures Group in Chicago.

ICE raw sugar prices started to climb in late January as dry weather diminished prospects for Brazil's next cane crop. The May contract hit a peak on March 6 of 18.47 cents, a four-month high for the front month.

Even so, the recent rally has cooled on expectations global supplies will offset reduced output in the world's top producer and exporter.

Boosted by government incentives, India's cash-strapped mills have been seizing market share from Brazil and exporting more sugar to Iran and Asian markets.

May white sugar futures on Liffe dropped $9.10, or 1.9 percent, to settle $461.90 a tonne.

Brazil's main centre-south sugar cane crop will fall to less than 577 million tonnes in the April-March season, indicative of an expected drop in yields below earlier projections, local analysts Canaplan said on Tuesday.

On Monday, competing analysts Archer Consulting put out their first estimate of the new crop at 590 million tonnes, 1 percent lower than the current crop, which officially ends this month but finished crushing in early January.

In cocoa, May ICE futures finished down $60, nearly two percent, at $2,946 a tonne, as speculators, spooked by the broader sell-off, booked profits from a recent rally that took prices to a 2-1/2-year peak of $3,027 on Tuesday.

May cocoa on Liffe settled down 27 pounds, or 1.4 percent, at 1,851 pounds a tonne, toppling from the previous day's 2-1/2-year high of 1,888 pounds.

(Editing by Dale Hudson, David Evans and Diane Craft)