SOFTS-Raw sugar sets one-month peak, gains 6.3% in the week

NEW YORK/LONDON, Jan 27 (Reuters) - Raw sugar futures on ICE closed higher on Friday, hitting a one-month peak and just shy of a 6-year high hit late in December. Arabica coffee futures added nearly 10% in the week.

SUGAR

* March raw sugar settled up 0.28 cents, or 1.4%, at 20.96 cents per lb, having hit a one-month high of 21.03 cents earlier. The contract had a weekly gain of 6.3%.

* The recent run-up in prices has been driven partly by a fund buying, along with a diminishing outlook for sugar output in India's top producing state Maharashtra, which could curb exports from the world's second-largest exporter.

* "Funds/Specs went into turbo mode and some of the trade was caught flat footed," said a U.S. broker.

* Changes in Brazil's fuel policy could also boost production of ethanol at the expense of sugar in the world's top grower.

* March white sugar rose $7.40, or 1.3%, at $562.40 a tonne. It gained 2.9% in the week.

COFFEE

* March arabica coffee settled up 2.75 cents, or 1.6%, at $1.699 per lb after setting a three-week high of $1.7030. The contract posted a robust 9.7% gain in the week.

* Dealers said the market had regained ground after hitting a 1-1/2-year low of $1.4205 on Jan. 11, but concerns remain over the demand outlook.

* "We expect a weak global economy to continue to constrain demand and limit any significant upside in global coffee prices," Fitch Solutions said in a note on Friday.

* March robusta coffee rose $59, or 3.0%, at $2,053 a tonne, having hit a three-month peak at $2,057/tonne.

COCOA

* March New York cocoa fell $2, or 0.1%, to $2,627 a tonne. The contract gained 2% in the week, after losing 3% in the previous one.

* Dealers said the upside continued to be capped by concerns about weakening demand after recent year-on-year declines in fourth-quarter grinds in Europe, North America and Asia.

* March London cocoa rose 2 pounds, or 0.1%, to 2,035 pounds per tonne.

* Ivory Coast will increase the amount of cocoa it processes domestically to 49% of production from October with the addition of several new plants, the head of the sector regulator said on Friday. (Reporting by Marcelo Teixeira and Nigel Hunt; editing by David Goodman and Sharon Singleton)