The dyed coral that I've seen are an unnatural green, yellow or pink which wear off after a few weeks. I don't think its possible to dye a coral white. Borneman does list 'cream' as being one of the color shades that Kenya Tree are sometimes available as in his Aquarium Corals book. However my regular ones can look pink, brown or orange depending on the lighting they're under and even white when stressed. As to why they don't frag well in your tank... perhaps some more information on your system would help to answer that question.
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