India pares coffee output forecast on damage caused by excess rain

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Nov 20 : India's coffee output will miss a forecast made in June after excessive rains in October damaged the crop in the nation's main growing region, likely bolstering global prices. Output may decline 5.6% to 276,600 metric tonne in the year to September 2009, from 293,000 tonne estimated previously, state-owned Coffee Board said on its web site on Thurdday.

Reduced supplies from India, which exports 80% of its harvest, may spur a rebound in the price of Robusta beans, which, in October, tumbled the most in more than eight years on concerns that slowing global growth will stifle demand for commodities. “With Brazil and Vietnam expected to have lower output next year, coffee prices may go higher,” said Anil Kumar Bhandari, a coffee grower based in Bangalore.

“Arabica coffee may trade at $1.10 to $1.25 a pound over the next six months,” Bhandari said. Futures for March delivery fell 0.7% to $1.1325 a pound in after-hours trading in New York. Prices have fallen 17% this year.

“Robusta, the bitter-tasting bean used in instant coffee, may rise by as much as $400-a-metric tonne by March as roasters rebuild stockpiles and output falls in Brazil,” GV Krishna Rau, chairman of the Coffee Board, said on Wednesday.

Brazil's output may drop to 40-42 million bags from 45 million bags this year, according to the Coffee Exporters Council. A bag weighs 60 kg (132 pounds). “That may lead to a supply deficit of as much as 10 million bags next year compared with a surplus,” Juan Lucas Restrepo, commercial manager, National Federation of Coffee Growers of Colombia, said on October 20.

India may gather 186,550 tonne of Robusta beans compared with 193,000 tonne estimated in June, and 90,050 tonne of Arabica, less than the 100,000 tonne forecasted, the board said. “The estimates may still not be met,” said Bhandari. “The target looks very ambitious and does not reflect the full impact of the rains during the blossom,” he said.

Heavy monsoon showers over Karnataka in October damaged crops, paring output by 8% to 197,975 tonne from the June-estimate, the Coffee Board said.