India Coffee Output May Meet Target as Rains Aid Crop Prospects

By Thomas Kutty Abraham

Aug. 5 (Bloomberg) -- India's coffee production, the third- biggest in Asia, is more likely to meet a government target after rains revived over the biggest coffee-growing areas, helping ease last month's dry spell that had threatened to lower yields.

The state-owned Coffee Board won't reduce its June estimate of 293,000 metric tons, Chairman G.V. Krishna Rau, said today in a telephone interview. Dry weather may cut harvest by 5 percent, Ramesh Rajah, president of the All India Coffee Exporters' Association, forecast on July 22.

``Rainfall in the past 10 days has been so good that it has almost wiped out the deficit seen last month,'' N. Bose Mandanna, a plantation owner and former vice chairman of the Board, said.

A bigger harvest in India, which exports 80 percent of its output, may weigh on robusta coffee prices, which have declined 5 percent in the past month. Global production may climb by about 9 percent next season, led by Brazil, and match demand, according to the London-based International Coffee Organization.

South interior Karnataka, home to the biggest coffee-growing districts of the country, received 97.2 millimeters (3.8 inches) of rain in the week ended July 30, twice the level deemed normal, according to the weather office. Rainfall in the region was 10 percent below average in June-July period, the agency said.

``Below normal rains won't have any major impact on coffee as it is grown in high rainfall zones,'' Coffee Board's Rau said. ``There are not many incidents of pest attacks'' because of inadequate rains last month, he said.

India's coffee exports rose 6.4 percent in the first seven months of this year as producers including local units of Nestle SA shipped more to nations including Russia and Italy. Shipments totaled 151,736 tons, compared with 142,631 tons a year earlier, according to provisional data on Coffee Board's Web site.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.