Coffee Harvest in India Delayed, Prices to Gain, Exporters' Group Predicts

The coffee harvest in India, the third-biggest grower in Asia, will be delayed by excess monsoon rainfall, adding to global supply problems that have driven prices to multiyear highs, an exporters’ group said.

The picking of beans may begin from the middle of November, three weeks later than normal, said Ramesh Rajah, president of the Coffee Exporters Association of India. India’s output and exports may still reach a record in the year from Oct. 1 after the rain boosted crop conditions, he said in an interview.

India’s harvest delay may help to extend rallies in arabica, which jumped to a 13-year high this week, and robusta, which is at the highest level in more than two years. Prices have jumped on concerns that unfavorable weather in Latin America and Vietnam and shipment delays in Brazil’s Santos Port are curbing global supplies. India cultivates both types of bean.

“Coffee prices may continue to climb until weather concerns ease in Brazil and Vietnam,” said Rajah, who correctly predicted a 10 percent gain in prices on Aug. 24. India’s “harvest has got delayed but the good news is that the crop is in excellent condition,” he said yesterday from Bangalore.

Arabica reached $2.046 a pound on ICE Futures U.S. in New York on Oct. 26, the highest price since August 1997, and the December-delivery contract ended yesterday at $1.966. Robusta advanced to $1,975 a metric ton on NYSE Liffe in London yesterday, the highest level since Oct. 6, 2008.

India’s total coffee production this year may match a forecast of 308,000 tons by the state-run Coffee Board, Rajah said. The harvest of robusta, used in instant coffees, may be more than the 208,500 tons estimated by the board, he said.

Monsoon Persists

The monsoon has yet to withdraw from the Southern Indian states of Karnataka and Kerala, which account for more than 90 percent of the nation’s production, according to the weather bureau. The June-to-September rainy season, which brings more than 70 percent of India’s annual precipitation, is still active over the region, according to the state-forecaster.

Rainfall in Vietnam, the biggest grower of robusta, may slow shipments and push back harvests, traders and growers said last week. Output of the next crop in Brazil, the world’s biggest overall producer, may drop to 36 million, 60-kilogram bags, the lowest in four years, after a drought hindered flowering, the nation’s coffee council said on Oct. 22.

Coffee shipments from producing nations will decline for a second year in 2010 from last year’s estimated 95.5 million bags and 2008’s 97.7 million bags, according to the International Coffee Organization.

“Roasters have waited long on the sidelines for prices to cool and with the winter approaching they may begin to cover needs,” Rajah said. Arabica may gain to $2.13 a pound, while robusta may climb to $2,150 a ton in the next few weeks, he said.

Exports from India, Asia’s third-biggest supplier, may reach at least 260,000 tons this year through December, 39 percent more than the 187,347 tons last year, Rajah said. Shipments jumped 59 percent to 247,624 tons between Jan. 1 and Oct. 26, data from the state-run Coffee Board of India show.