(Recasts throughout; updates prices; adds comment, NEW YORK dateline) NEW YORK/LONDON, Nov 30 (Reuters) - Cocoa futures on ICE dropped sharply on Thursday, with the London market falling to a 2-1/2-month low on pressure from the rallying British pound, while arabica coffee sank on month-end selling after tapping a seven-week high.
* March London cocoa settled down 43 pounds, or 2.8 percent, at 1,495 pounds per tonne, after falling to the lowest since Sept. 13 at 1,481 pounds. It closed the month down 5.2 percent, the weakest month for the second position since April.
* March New York cocoa settled down $57, or 2.7 percent, at $2,049 per tonne. It closed the month down 1.9 percent.
* "The pound has been weighing on London," one dealer said. "And the industry hasn't exactly been falling over (itself) to lay on cover, there's still a lack of demand."
* Sterling hit a two-month peak as hopes grew of a Brexit deal between Britain and the European Union. The sharp drop in London pressured New York prices, traders said.
* Meanwhile, crop-friendly weather and strong arrivals in top grower Ivory Coast have boosted expectations for higher output, dealers said.
* The International Cocoa Organization (ICCO) said slightly reduced its 2016-17 global cocoa surplus forecast to 335,000 tonnes from the previous estimate of 371,000 tonnes.
* March arabica coffee settled down 3.7 cents, or 2.8 percent, at $1.285 per lb, after rising to a seven-week high at $1.33. It closed November down 0.8 percent.
* Arabica futures fell sharply, following six straight sessions higher, extending losses below the 50-day moving average around $1.30, on month-end selling, traders said.
* Total arabica futures open interest fell for the 17th straight session to reach 193,678 lots on Wednesday, ICE data showed.
* January robusta coffee settled down $40, or 2.3 percent, at $1,726 per tonne, with favorable weather in top grower Vietnam expected to boost supplies there.
* November robusta settled flat at $1,793 on its last trading day, a $67 premium to January.
* March raw sugar settled up 0.01 cent, or 0.1 percent, at 15.08 cents per lb, paring gains made on earlier short-covering, dealers said.
* The spot contract closed November up 2.3 percent.
* "We think investors are nearing the end of the buy back process but their guns have not yet fallen completely silent," said Tobin Gorey of the Commonwealth Bank of Australia.
* March white sugar settled up $1.10, or 0.3 percent, at $390.40 per tonne.
(Reporting by Marcy Nicholson in New York and Ana Ionova in London; editing by David Evans and Marguerita Choy)