SOFTS-Coffee retraces down as players grab profits

* Focus on lower cocoa exports in No. 1 grower Ivory Coast

* Arbitrage in cocoa futures

* Sugar, coffee correct down from Tuesday's steep hike (Adds byline, dateline. Writes through with U.S. comments and closing prices for U.S. ICE markets)

By Marcy Nicholson and David Brough

NEW YORK/LONDON, Jan 7 (Reuters) - Sugar, coffee and London cocoa futures fell with other commodity markets on Wednesday, tracking losses in crude oil.

Oil slid more than 12 percent below $43 a barrel after a U.S. government report showed inventories of crude rose much more than expected in the world's top energy consumer.

Sugar and coffee futures retraced Tuesday's steep rallies on profit-taking while London cocoa fell on arbitrage. The U.S. cocoa market settled firm, buoyed by the firm sterling against the dollar and on bullish export figures in top producer Ivory Coast, dealers said.

"It was a hell of a move yesterday. Today there just isn't the trigger. We haven't seen much in the way of follow-through," said Jack Scoville, a vice-president with brokers Price Group in Chicago.

"The hammer jab in crude has hurt the sugar a bit," Scoville said.

Benchmark March raw sugar futures closed down 0.29 cent at 11.98 cents per lb, while London March white sugar futures ended down $1.40 at $334.00 per tonne.

Coffee prices were lower as the market slipped back after Tuesday's strong advance.

March arabica futures on ICE finished down 1.90 cents at $1.1420 per lb. The contract soared 8.40 cents, or 7.8 percent, on Tuesday to close at $1.1610 per lb, the highest close since Nov 28.

"I do think the market's turning a trend here. I think it's heading higher," Scoville said, eyeing Tuesday's jump.

"Today the market is consolidating a little bit. It is just doing exactly what it should do, taking a rest to get more fuel and more momentum on the upside," one dealer said.

Dealers said light profit taking and origin selling weighed on prices.

Robusta coffee futures in London were also lower with March finishing $25 lower at $1,648 a tonne. The contract rose $103, or 6.9 percent, on Tuesday.

Dealers said the premium for January had risen to more than $300, boosted by concern about whether sufficient tenderable supplies will be available to deliver against the still-large open position.

London cocoa futures reversed earlier gains after sterling gained ground, with activity centered on arbitrage between the London and New York markets.

London May cocoa ended 17 pounds lower at 1,752 pounds per tonne, while ICE March cocoa closed up $28 at $2,596 per tonne.

Cocoa exports in Ivory Coast in the 2008/09 season are down 8 percent at 400,000 tonnes compared with 440,000 tonnes in the first three months of the 2007/08 season, said Gilbert Ano N'Guessan, who heads Ivory Coast's cocoa sector management committee.

The announcement provided a market boost, traders said.

Dealers said the pace of bean arrivals to West African ports had picked up lately after a slow start last year, and attention focused on unseasonal rains in Ivory Coast.

The rains boded well for the development of a crop that has so far disappointed, they said. (Additional reporting by Nigel Hunt in London)