Oct. 29 (Bloomberg) -- Global coffee supplies may tighten after an Indian exporters’ group forecast a delay in harvesting because of extended rains and an industry association in Vietnam said that production may decline, potentially boosting prices.

India’s harvest may begin from the middle of November, about three weeks later than normal, Ramesh Rajah, president of the Coffee Exporters Association of India, said in an interview. Separately, Nguyen Van An, a board member of the Vietnam Coffee and Cocoa Association, said today by phone that output may drop as much as 3 percent to 1.1 million metric tons in 2010-2011.

The forecasts may extend rallies in arabica, which jumped to a 13-year high this week, and robusta, at the highest in more than two years. Prices have jumped on concerns that unfavorable weather in Latin America and Vietnam, and delays at Brazil’s Santos Port are curbing supplies. Vietnam is the biggest robusta producer and India is Asia’s third-largest grower.

“Coffee prices may continue to climb until weather concerns ease in Brazil and Vietnam,” said Rajah, who correctly predicted a 10 percent gain in prices on Aug. 24. India’s “harvest has got delayed but the good news is that the crop is in excellent condition,” he said yesterday from Bangalore.

Arabica reached $2.046 a pound on ICE Futures U.S. in New York on Oct. 26, the highest price since August 1997, and the December-delivery contract ended yesterday at $1.966. Robusta advanced to $1,975 a metric ton on NYSE Liffe in London yesterday, the highest level since Oct. 6, 2008.

Indian Harvest

India’s total coffee production this year may be a record and match a forecast of 308,000 tons from the state-run Coffee Board of India, Rajah said. The harvest of robusta, used in instant coffees, may be more than the 208,500 tons estimated by the board, he said yesterday from Bangalore.

The monsoon has yet to withdraw from the Southern Indian states of Karnataka and Kerala, which account for more than 90 percent of the nation’s production, according to the weather bureau. The June-to-September rainy season, which brings more than 70 percent of India’s annual precipitation, is still active over the region, according to the state forecaster.

In Vietnam, the outlook for the year from Oct. 1 from the association’s An is less than the median forecast harvest of 1.2 million tons from a Bloomberg News survey of 10 growers, analysts and traders conducted earlier this month. Officials in Vietnam’s three largest growing provinces -- Dak Lak, Lam Dong and Gia Lai -- also forecast production gains.

Smaller Beans

Rainfall in Vietnam’s Central Highlands, the nation’s main coffee-growing area, was about 30 percent less this year than in previous years, An said. “It hurt the development of coffee cherries, causing the beans to have a smaller size,” An said from Vicofa, as the association is known.

Output of the next crop in Brazil, the world’s biggest overall producer, may drop to 36 million, 60-kilogram bags, the lowest in four years, after a drought hindered flowering, the South American nation’s coffee council said on Oct. 22.

Coffee shipments from producers will decline for a second year in 2010 from last year’s estimated 95.5 million bags and 2008’s 97.7 million bags, according to the International Coffee Organization.

“Roasters have waited long on the sidelines for prices to cool and with the winter approaching they may begin to cover needs,” Rajah said. Arabica may gain to $2.13 a pound, while robusta may climb to $2,150 a ton in a few weeks, Rajah said.

“Global coffee prices will be good this year, so we expect to earn $1.8 billion to $2 billion in export turnover,” said An at Vicofa, a non-governmental organization that represents producers and traders and helps to shape government policy.

--Nguyen Dieu Tu Uyen. Editors: Jake Lloyd-Smith, Matt Oakley

To contact the reporters on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net; Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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