Cocoa rises on Ivory Coast standoff, coffee falls

* Coffee falls on investor liquidation

* Brazil sugar harvest delays underpin prices

* Cocoa industry cover seen comfortable - trade

(Adds trade comment, bylines, updates prices)

By Sarah McFarlane and David Brough

LONDON, April 4 (Reuters) - ICE cocoa futures rose on Monday as a standoff between presidential rivals in Ivory Coast cut expectations there could be a quick resolution to a conflict which has brought exports from the top grower to a virtual halt.

ICE raw sugar rose on investor buying supported by other commodity markets, eyeing key resistance around 28.00-28.20 cents a lb, and coffee fell on investor liquidation.

In Ivory Coast, the world's top cocoa producer, fighters loyal to presidential rivals Laurent Gbagbo and Alassane Ouattara held their respective positions across Abidjan on Sunday, a day that saw less fighting than the previous three.

Cocoa prices were higher after market expectations of a resolution to Ivory Coast's conflict were not met.

"On Friday some big cities were being controlled by Ouattara's soldiers and everybody was expecting Abidjan to fall during the weekend. It didn't, so the market has bounced," a London-based broker said.

"Predicting the cocoa market these days is as easy as flipping a coin.

"There's still a risk premium in the market due to the political tensions in Ivory Coast.

"If the situation was to come back to normal we would see the market coming back down to around 1,850 pounds a tonne.

"Industry cover is at around six months which is fairly standard ... it's fairly comfortable."

ICE May cocoa rose $53 or 1.8 percent to $3,064 a tonne by 1037 GMT.

Liffe July cocoa was up 24 pounds or 1.2 percent to 1,974 pounds a tonne in slim volume of 942 lots.

ICE arabica and robusta coffee fell on investor liquidation in modest volumes.

"We've seen a fairly big amount of speculator liquidation in New York and London," the London-based broker said.

The widening spread between London and New York prices could relate to Brazil's impending frost season which can see a risk premium become factored into arabica prices.

"The weather risk will start to be factored into prices," the broker said.

"We are bullish arabicas," the broker said, adding Colombia's production will remain below historic averages, while the outlook for coffee demand was strong.

ICE May arabica coffee fell 0.65 cent or 0.25 percent to $2.5925 per lb at 1039 GMT GMT, while Liffe May coffee was down $82 or 3.4 percent to $2,339 per tonne in moderate turnover of 4,213 lots.

BRAZIL CANE HARVEST DELAY

Raw sugar futures on ICE rose, tracking gains in other commodity markets, such as oil and grains, and dealers saw key resistance at 28.00-28.20 cents a lb.

ICE May raw sugar futures rose 0.22 cent or 0.80 percent to 27.66 cents a lb at 1041 GMT.

New York sugar remains technically neutral as a consolidation between 26.37 cents to 28.20 cents per lb continues, Reuters market analyst Wang Tao said.

Liffe May white sugar was up $3.70 or 0.5 percent to $716.90 per tonne in light turnover of 2,189 lots.

Dealers continued to keep a close watch on the harvest outlook in top producer Brazil. Rains have led to harvest delays in some areas.

"The delay in the Brazilian harvest and a long tail (late harvesting) in Thailand are cancelling each other out in terms of their market impact," one sugar futures dealer said.

(Source: http://www.forexyard.com/en/news/SOFTS-Cocoa-rises-on-Ivory-Coast-standoff-coffee-falls-2011-04-04T112144Z)