* Cocoa steady, dealers monitor Ivory Coast develoments
* Vietnam coffee supplies weigh on robusta prices
* ICE sugar stuck in a 26-28 cents a lb range
(Adds trade comment, updates prices)
By David Brough and Sarah McFarlane
LONDON, April 7 (Reuters) - Arabica coffee prices rallied over 3 percent higher on Thursday as funds added positions and a shortage of high quality beans underpinned the market.
Cocoa futures were steady as the prolonged conflict between presidential rivals in Ivory Coast remained unresolved, while ICE raw sugar futures eased.
Arabica coffee edged towards the 34-year high of $2.9665 a lb hit on March 9.
"You've seen some good fund buying and there isn't much selling, producers are waiting for prices above $2.80 a lb," a London-based broker said.
ICE July arabica coffee rose 8.10 cent or 3.02 percent to $2.7600 per lb at 1518 GMT.
Robusta coffee futures were steady, as ample supplies from top producer Vietnam weighed.
"There's an awful lot of robusta to come out of Vietnam and it's started to come towards Europe," Gary Mead, analyst at VM Group said.
Liffe July robustas rose $43 or 1.8 percent to $2,432 a tonne.
In Ivory Coast, forces loyal to presidential claimant Alassane Ouattara laid siege to incumbent leader Laurent Gbagbo's residence after an attempt to pluck him from his bunker on Wednesday met with fierce resistance.
Cocoa exports from Ivory Coast will take a couple of weeks to resume once incumbent leader Laurent Gbagbo steps down and the security in the world's top producer stabilises, shippers said.
"The cocoa market has come off quite significantly in the past month due to the prospect of cocoa exports freeing up," a senior analyst with a large trade house said.
ICE cocoa futures prices have fallen by a fifth since hitting a 32-year high at $3,775 per tonne a month ago.
ICE July cocoa was down $2 or 0.1 percent at $3,012 a tonne, while Liffe July cocoa was down 1 pounds or 0.1 percent to 1,920 pounds per tonne.
SUGAR SLIPS
ICE raw sugar futures dipped but remained stuck in a 26-28 cents a lb range.
"We're at the bottom of the range, so downside price risk is a bit greater," said a senior European analyst.
The sugar market was caught between a rain-delayed harvest in Brazil, which was bullish near term, and a large crop in Thailand, which was bearish.
Dealers also closely tracked ethanol reform moves in Brazil.
Brazil wants to tighten regulation of the domestic ethanol market to protect fuel supplies, a senior government official said on Wednesday, a move that could ripple through global sugar markets.
Dealers noted talk that India could soon authorise a further 500,000 tonnes of unrestricted sugar exports, also seen as bearish for the global market.
ICE May raw sugar futures fell 0.34 cent or 1.3 percent to 26.37 cents a lb.
"We believe that the sugar market will remain in its current 26-28 cents a lb range basis May for a while," said Nick Penney of Sucden Financial.
"With three weeks before expiry of the May contract (on April 29) and the fund roll (into July) coming to a close, prices may recover as we approach the end of the month."
London May white sugar fell $1.20 or 0.2 percent to $704.60 per tonne.
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