LONDON , Oct 27 (Reuters) - Coffee futures fell on Monday as the dollar surged to a 2-1/2-year high versus the euro, while sugar erased losses on short-covering and London cocoa gained as the pound fell close to a 6-year low against the dollar.

    The U.S. dollar rallied as plunging stock markets and fears of global recession prompted investors to abandon risky trades.

    "Global financial and commodity markets are suffering again today as liquidations continue," wrote sugar trader Peter Hoyt in a daily market report of UK broker Sucden.

    Coffee was the weakest among the soft commodities, as the stronger dollar triggered Asian hedging.

    "The strengthening of the dollar against the Indonesian and Vietnamese currencies is bringing hedging to the London market," a London robusta coffee dealer said.

    London January robustas  fell to a 17-month low, basis second month, of $1,580 per tonne. January stood at $1,583 per tonne, down $85 or 5.1 percent, in moderate volume of 6,512 lots at 1441 GMT. Dealers saw nearby support at $1,550.

    ICE December  arabicas were down 3.3 cents or 3 percent to $1.0535 per lb. Dealers saw support at $1.0330 per lb.

    London cocoa futures probed just above eight-month lows as recessionary fears dampened the outlook for soft commodities, and later recovered ground as the pound fell nearly 4 percent against the dollar, battered by recession fears.      U.S. cocoa futures held just above Friday's 11-month lows, on pressure from index fund selling dictated by the stronger dollar.

    "The London market has been dragged down by New York ," a London cocoa trader said. "People want to be out of New York because of the stronger dollar."

    Benchmark ICE December cocoa clawed back ground to trade down $35 or 1.8 percent at $1,942 per tonne, hovering above Friday's 11-month low of $1,867.

    Cocoa farmers in the world's top grower, Ivory Coast , enter a second week of striking over prices, producers' unions said on Monday.

    Farmers in the important southwestern region around the port of San Pedro , which handles nearly half the country's output, and in the less important eastern region began disrupting deliveries of cocoa last week to press their demands for higher prices.

    ICE raw sugar fell almost 2 percent early, pushed lower by the stronger dollar, weak oil prices and worries over the outlook for global demand, and later recovered as participants covered short positions, dealers said.

    ICE March  raw sugar was up 0.06 cent, or 0.6 percent, to 10.82 cents a lb at 1457 GMT, just above Friday's four-month low, basis front-month, of 10.44 cents a lb.

    London benchmark December  white sugar futures traded up $5.3 to $304.00, above Friday's 10-month low of $294.00 per tonne, basis front-month.