NEW YORK/LONDON, Jan 31 (Reuters) -

Raw sugar futures on ICE hit a six-year high on Tuesday on continuing worries over tightening supply, highlighted by a worsening production outlook in India.

Arabica coffee, meanwhile, rallied nearly 7% to a three-month peak.

SUGAR

* March raw sugar settled up 0.55 cents, or 2.6%, at 21.76 cents per lb after touching its highest since late 2016 at 21.82 cents.

* India, the world's second-largest sugar exporter, is

likely to produce 34 million tonnes of the sweetener

in 2022/23, down 7% from the previous forecast, a leading trade body said.

* Dealers said sugar prices were being boosted by that production outlook coupled with concerns that top exporter Brazil might also produce less if its energy policy improves ethanol's profitability.

* Brazil's Finance Ministry said it expects federal taxes on fuels to be reinstated in March, which would benefit ethanol.

* Brokers, however, added that technical signals suggest the market is moving close to over-bought territory.

* A global sugar deficit of 1.01 million tonnes is projected for the 2023/24 season, ending a run of three successive surpluses, analyst Green Pool said.

* March white sugar rose $12.00, or 2.1%, at $580.70 a tonne.

COFFEE

* March arabica coffee settled up 11.35 cents, or 6.7%, at $1.8175 per lb after touching the highest price since early November at $1.8280.

* Dealers reported a strong short-covering movement by funds - which have been carrying a large short position - when the market broke resistance around $1.75/lb.

* "Shorts got squeezed as market fundamentals look better, with global inventory clearly not as robust as appeared," one U.S. broker said, citing reduced increases in certified stocks and nearly daily withdraws.

* Dealers also cited strong differentials for Brazilian coffee.

* March robusta coffee rose $70, or 3.4%, at $2,107 a tonne.

* Indonesia exported 16,152.89 tonnes of Sumatran robusta coffee beans from Lampung province in December, down 51% from a year earlier.

COCOA

* March New York cocoa fell $30, or 1.1%, to $2,581 a tonne.

* Above-average rain in most of top grower Ivory Coast's cocoa regions last week will boost the April to September mid-crop after weeks of dry weather, farmers said.

* March London cocoa fell 13 pounds, or 0.6%, to 2,025 pounds per tonne. (Reporting by Marcelo Teixeira and Maytaal Angel Editing by David Goodman)