SOFTS-Sugar powers to 4-month peak, rest slide

* Indian imports, tight supplies stoke sugar rally

* Late profit-taking deflates London cocoa

* Coffee meanders lower while supported by short crop (Recasts with US comments, prices; adds NY dateline/byline)

By Rene Pastor and Michael Taylor

NEW YORK/LONDON, Feb 9 (Reuters) - Sugar prices galloped to their highest level in more than four months Monday as the prospect of imports by India, the weak dollar and tight supplies inspired a rally in the market.

"The fact that they are going to be importing is a market mover," Larry Young, an analyst for brokerage Infinity Futures in Chicago, said, referring to India.

"The fundamental for sugar going forward is pretty constructive, so I doubt we've seen the highs for the year, but, short term, we might need to back off a little to encourage some of that physical demand to step forward," Rabobank soft commodity trader Nick Hungate said.

The market was waiting for more word on India, which recently approved duty-free sugar imports. Most players believe India's eventual imports could range from 1 million to 1.5 million tonnes.

Sugar was also bolstered by tight nearby supplies before the start of the Brazilian cane harvest in its key center-south region in coming months. The soft dollar was also a factor in the sweetener's strength, dealers said.

"It is because there is no sugar," a dealer in London said, adding that values would keep rising due to that basic factor.

Slack consumer demand at this time may act as a brake on a further rise, though, analysts said.

This was underscored by news that the world's largest sugar refinery, the Al Khaleej plant in Dubai, was operating at 60 percent capacity due to slow regional demand stemming from the global economic crisis.

New York's March raw sugar contract increased 0.16 cent to end at 13.28 cents per lb, the highest finish for the spot contract since it hit nearly 14 cents at the start of October.

The London March white sugar contract added $6.70 to close at $393.20 per tonne, the loftiest in four months.

COCOA STUMBLES LATE, COFFEE STABLE

Cocoa futures were hit by a late flurry of profit-taking, but Young and other analysts said any retreat was limited by supply fears in top producer Ivory Coast.

Bean arrivals in Ivorian ports continued to lag as they reached around 745,000 tonnes by Feb. 8, compared with 945,120 tonnes in the same period of the previous season, according to exporters' estimates.

New York's May cocoa futures fell $6 to close at $2,827 per tonne, having eased back from a more than 5-month high reached last week.

London's May cocoa contract tumbled 32 pounds, or 1.67 percent, to end at 1,939 pounds per tonne, having failed at the session top of 1,996 pounds.

Coffee prices were mixed, although the longer-term outlook for bean values may mean higher prices because of a potential supply crunch.

U.S. arabica futures gained on the weak dollar, firm fundamentals and spread trade, dealers said.

New York's March arabica contract climbed 1.85 cent to close at $1.214 per lb, while London's May robusta futures lost $12 to end at $1,668 per tonne. (Editing by Walter Bagley)