* Arabica prices seen high until crop damage clearer-analyst
* Raw sugar consolidates after falling from 4-mth high
* ICE cocoa prices are below 2-1/2-year high
(New throughout, updates closing prices; adds analyst comment, second byline, NEW YORK dateline)
NEW YORK/LONDON, March 19 (Reuters) - Arabica coffee futures on ICE tumbled 3 percent on Wednesday, sinking further from last week's two-year high as forecasts for much-needed rain in top grower Brazil attracted investor selling, while raw sugar consolidated higher.
Liffe cocoa futures inched up in thin dealings to contract highs while the ICE Futures U.S. market flirted with Monday's 2-1/2-year peak, boosted by strong consumption growth that was expected to outstrip supply.
Arabica coffee is on track for its first week lower in eight weeks, giving back major gains made in the past two months that saw prices push up as much as 85 percent since the start of the year due to a crop-damaging drought in Brazil. Total open interest has climbed steadily over the past eight sessions to a 4-1/2-month high at 171,534 lots on March 18, exchange data showed.
May arabica coffee futures on ICE closed down 6.05 cents or 3.2 percent, at $1.8550 per lb. The second month peaked at $2.0975 last week, its highest level since February 2012.
"If sufficient rains come in Brazil, this might take some of the weather premium out of the market, although some irreversible damage has certainly been done," said Birgit Wippler, soft commodities analyst with F.O. Licht.
"Prices will remain elevated at least until we get a clearer picture of the extent of damage from the drought, when farmers start harvesting."
Forecasts for significant rainfall in Brazil's coffee belt early next week, however, may not be as beneficial as speculators believe.
"I think traders are being delusional if they think heavy rains forecast for Brazil will make a difference in the crop," said Judith Ganes-Chase, president of J Ganes Consulting.
"The ground has been baked hard. Most of the rain will simply run off and not be absorbed into the soil, especially if it is unusually heavy rains in a quick time period."
May robusta coffee fell in sympathy with arabica futures, ending weaker for the fifth straight day after touching a 17-month high last week at $2,218. The contract closed down $45, or 2.1 percent, at $2,090 a tonne.
Raw sugar futures consolidated higher after falling from a four-month peak of 18.47 cents hit earlier this month when dry weather concerns in Brazil drove prices higher.
Analysts expect ample stocks should provide a buffer to any production losses in Brazil due to a drought in January and February.
"Sugar continues to be available, and that availability will only increase as we go into the new crop in the centre-south of Brazil," said James Kirkup, head of sugar brokerage at ABN AMRO in London.
May raw sugar futures on ICE ended up 0.18 cent, or 1 percent, at 17.32 cents a lb. Liffe May white sugar futures closed up $3.50, or 0.8 percent, at $459.60 per tonne.
COCOA FACES DEFICIT
Cocoa futures on ICE firmed, with May ended up $11, or 0.4 percent, at $3,025, holding just below Monday's 2-1/2-year high of $3,039. Total volume was thin around 7,300 lots, roughly a third of normal volumes.
The global cocoa market is facing its second consecutive deficit in 2013/14. Additionally, the growing likelihood of an El Nino weather event underpinned cocoa prices as adverse weather in growing countries could tighten supply.
El Nino can cause flooding and heavy rains in the United States and South America and drought in Southeast Asia and Australia.
Cocoa futures on Liffe were firm with July prices settling up 3 pounds, or 0.2 percent, at 1,896 pounds a tonne, having earlier touched a contract high of 1,898 pounds.
(Editing by Anthony Barker and Stephen Powell)