Robusta Exports Drop 10% as Heavy Rains Shrink Harvest

Coffee shipments from India, Asia’s third-largest grower, are poised to fall this year as a rally in global prices deters buyers from Italy to Russia and after unseasonal rains cut output for the first time in six years.

Exports may decline as much as 10 percent from 312,756 metric tons in 2013, said Ramesh Rajah, president of the Coffee Exporters Association of India. The harvest probably dropped below 300,000 tons in the 12 months started Oct. 1 from a record 318,200 tons a year earlier, he said.

Reduced supplies from India, where robusta accounts for 70 percent of output, may help a surge in prices of the beans used by Nestle SA in instant drinks. Futures of the arabica variety, brewed by specialty companies including Starbucks Corp., advanced in New York to a two-year high in March and robusta in London jumped 20 percent this year as drought threatened crops in Brazil, the largest producer and exporter.

Robusta added 0.1 percent to $2,014 a ton on NYSE Liffe on 2 April. Arabica rose 1.1 percent to $1.746 a pound on ICE Futures U.S. after reaching a two-year high of $2.0975 in March.

The state-run Coffee Board cut its crop estimate for 2013-2014 to 311,500 tons in January from a record 347,000 tons predicted at the start of the season, citing heavy rains in the Karnataka region, which represents about 70 percent of output.