India Coffee Crop May Rise to Record on Weather, Board Says.

Coffee production in India, the third biggest grower in Asia, may rise 6.7 percent to a record next year aided by good rains, and likely boosting exports.

Output for the crop year starting Oct. 1 may rise to 322,250 metric tons from 302,000 tons a year ago, the state- owned Coffee Board said today. Arabica production may gain 11 percent to 104,525 tons, while robusta output may advance 4.8 percent to 217,725 tons next year, it said.

A record crop in India, which exports almost two-thirds of its output, may cool robusta coffee prices, which jumped 24 percent in the first five months this year, before sliding 4 percent in June. Arabica futures in New York jumped to a 14-year high in May, raising costs for Nestle SA and Kraft Foods Inc., as smaller global crops and rising demand cut inventories.

Robusta coffee for September delivery gained 2.1 percent to $2,044 a ton in London. Arabica coffee for September delivery was up 0.4 percent at $2.4165 a pound in New York.

“Good weather and crop condition, and relatively stable prices encouraged better husbandry practices, helping to invigorate production in Karnataka,” the board said. Karnataka produces around 70 percent of the country’s total output.

Arabica beans are grown mainly in Latin America and brewed by specialty companies including Starbucks Corp. Robusta, used in instant coffee, is harvested in Asia and parts of Africa.

India’s coffee shipments during Oct. 1-July 21 jumped to 303,680 tons valued at $887.46 million, compared with 213,508 tons worth $454.53 million a year earlier, according to the board. The country exported 268,989 tons in 2010-11.

Italy and Russia are among the buyers of Indian coffee.

Source : bloomberg.com