* Robusta coffee hit 1-year high on physical demand
* Speculators switch to large net long in ICE raw sugar
* Cocoa underpinned by expected global deficit in 2013/14
By Nigel Hunt
LONDON, March 10 (Reuters) - Coffee prices rose on Monday towards last week's two-year high as dry weather in Brazil raised the prospect of a global deficit in 2014/15 and potentially the following season as well.
Sugar prices fell, with the recent run-up seen overdone given more than ample supplies while cocoa was little changed, holding just below last month's 2-1/2 year high.
Arabica coffee prices on ICE have surged around 80 percent since the start of this year, boosted by concerns that dry weather in top grower Brazil would cut the size of the 2014/15 crops and could also curtail production in 2015/16.
A Reuters poll published on Friday indicated the dry weather had cut forecasts for Brazil's coffee crop in 2014/15 by more than 10 percent, with a median result of 48.9 million (60-kg) bags.
May arabica futures were 2.45 cents, or 1.2 percent, higher at $1.9930 per lb as of 1135 GMT. The contract peaked at $2.0410 per lb on Wednesday, its highest level since March 2012.
"Brazil needs to be producing a minimum 50 million bags, just for the world arabica market to be pretty much in balance," said Andrea Thompson, an analyst with CoffeeNetwork, part of INTL FC Stone, in a market note.
International Coffee Organization executive director Roberio Oliveira Silva said on Friday that he expected a global coffee deficit of at least 2 million bags in 2014/15, the first shortfall in five years.
Analysts said the dry weather should also reduce the size of the 2015/16 crop, which had already been expected to be lower as it will be an "off-year" in Brazil's biennial crop cycle.
"An arabica deficit in 2014/15, compounded by the unquestionable knock-on impact on the 2015/16 season, given it is an "off" and therefore potential deficit season anyway, would be fuel enough to increase the chances of the 300 cents/lb level," Thompson said.
Arabica coffee prices climbed above $3.00 per lb during the market's last major rally in early 2011.
However, dealers said there was still a lot of uncertainty about the level of this year's crop in Brazil with the weather pattern this season unprecedented in recent history.
"There is a very wide range (of crop forecasts) at the moment and nobody really knows what the outcome will be," Commerzbank analyst Michaela Kuhl said.
Kuhl said the market's current mood was "something quite close to panic."
"It is very difficult to forecast when this (rally) will end but we think prices of $2.00 per lb are overdone in the current situation," she added.
Robusta coffee futures on Liffe were also higher, boosted partly by strong demand in the physical market following a sharp widening in its discount to arabicas in recent weeks.
May Liffe robusta coffee was up $28, or 1.3 percent, at $2,127 per tonne after climbing to a one-year peak of $2,143 per tonne.
Sugar prices were lower with supplies remaining ample despite some reduction in the expected size of the crop in Brazil, which is also the top producer of the sweetener.
"It has been several years now with huge surpluses so there is no scarcity even if there is an end coming to these sugar surpluses in the next season," Kuhl of Commerzbank said.
May raw sugar futures on ICE were off 0.29 cent, or 1.6 percent, at 17.72 cents a lb.
Speculators switched to a large net long position in ICE raw sugar contracts in the week to March 4, U.S. Commodity Futures Trading Commission data showed on Friday.
"More questions are being asked regarding the sustainability of the recent rally in prices given speculative investors have now built a net-long position, a significant contrast to the imposing net-short position which had been accumulated a few months ago," Commonwealth Bank of Australia analyst Luke Mathews said in a research note.
May white sugar futures on Liffe fell $3.60, or 0.8 percent, to $471.80 per tonne.
Cocoa futures were little changed as the market remained underpinned by an expected global deficit in the 2013/14 season.
ICE May cocoa futures were up $3, or 0.1 percent, at $2,984 per tonne as the market continued to hold just below a 2-1/2-year high of $3,002 set last month.
"The increase has come to an end but we think prices will stay high for quite some time," Kuhl of Commerzbank said.
May cocoa futures on Liffe rose 5 pounds, or 0.3 percent, to 1,861 pounds a tonne. (Editing by Susan Fenton)