* Analyst sees risks of selloff in arabicas to take profits
* Broker voices concern cane damaged due to Brazil drought
* Cocoa moves sideways, underpinned by firm demand (Adds trade comment, updates prices)
By David Brough
LONDON, March 5 (Reuters) - Arabica coffee futures on ICE rose on Wednesday and raw sugar gained, both due to nagging worries over damage to crops in top grower Brazil.
Arabica coffee futures rose on fears that prolonged dry weather in Brazil had done substantial damage to crops to be harvested in 2014/15.
“When we look at Brazil in the next harvest year (2014/15), we could be in a higher price structure,” said Edward Bell, a senior commodities analyst at the Economist Intelligence Unit (EIU)
ICE second-month arabica futures were up 1.3 cents or 0.7 percent at $1.8675 per lb as of 1123 GMT.
“There is ample opportunity now for investors to take some profit, and that would take some upward volatility out of the coffee market,” Bell said.
Prices have surged 65 percent so far this year, fuelled by concerns over the impact of the unseasonably dry weather in Brazil on the coming 2014/15 crop.
They dropped in late trading on Tuesday on profit taking, after rising almost to Monday’s two-year high of $1.9780 and within sight of the psychologically important $2 level.
Coffee futures markets are carefully tracking Brazilian weather reports and data gauging the extent of damage to crops.
Analyst Stefan Uhlenbrock of F.O. Licht forecast that coffee output in Brazil would fall by around 5 million 60-kg bags to 48 million bags in 2014/15.
Second-month Liffe robusta coffee was down $20 or 1 percent at $2,057 per tonne in modest volume of 1,934 lots, having on Tuesday touched a one-year peak of $2,136 per tonne as farmer selling in Vietnam’s Central Highlands belt slowed.
Sugar futures also rose on fears over the impact of damage from the Brazilian drought.
“The rains are coming, but the damage is already there,” said Eduardo Milanes, a broker with Sucden Financial, referring to forecasts for more rain in coming days in cane and coffee growing areas of Brazil.
May raw sugar on ICE was up 0.12 cent or 0.7 percent at 17.86 cents a lb.
May white sugar futures on Liffe rose $2.90, or 0.6 percent, to $479.40 per tonne in slim volume of 655 lots.
ICE May cocoa futures were up $3, or 0.1 percent, at $2,959 per tonne, underpinned by expectations of a global deficit and firm demand.
May cocoa futures on Liffe eased 3 pounds, or 0.2 percent, to 1,841 pounds ($3,100) a tonne in slim volume of 3,181 lots.
“The market, having trended significantly higher, is working sideways,” a London-based broker said. “The general uptrend is still intact. The funds have been holding onto their longs.” ($1 = 0.5998 British pounds) (editing by Jane Baird)