India coffee prices increase on tight supply, global cues

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Mumbai, Jul 4 : Prices at the Indian Coffee Trade Association auction on Thursday rose on a tight supply situation and tracking firm global cues, traders said on Friday.

Arrivals have come down as almost 80-90% harvesting is complete, said a Bangalore-based trader.

In India, peak arabica harvesting starts in December and ends in February, while robusta arrivals start in February and continue through April.

Robusta is more tolerant to warm conditions than arabica and constitutes about 65% of India's coffee output.

Arabica plantation received good support from exporters and prices were higher by Rs 100-150 per 50 kg, another trader said, adding that firm international prices also boosted the sentiment.

The September arabica contract rose to its 3-month high on Wednesday. Total quantity on offer was 216 tonne and about 37 tonne were sold, an auctioneer said. India's coffee exports rose 3.1% to 132,846 tonne during the first six months of 2008 on good export demand from European countries, a coffee board official said on Tuesday. The country produces only 4% of the world's coffee, but exports 70-80% of its output.

India exports coffee mainly to Italy, Germany, and Russia. Italy accounts for about 25% of the country's coffee exports, followed by the Russian federation and Germany.