Bangalore: India’s coffee production will hit a 10-year low this year due to unusual heavy rains during south-west monsoons in regions growing the bean that could hit the exports of the commodity from the country and impact prices.

The state-run Coffee Board estimates final production of the beans for the year to September 2008, to be at 262,000 tonnes—about 10% lower than estimates made in May.

Traders and exporters say the low output could put pressure on prices and may have a negative impact on exports to markets such as Italy, Russia and Germany. They had estimated crop size to be at 270,000 tonnes.

“The entire loss is due to the unexpected heavy rains, which were in excess of 35-40% over the normal rains in key growing areas in Karnataka and Kerala," said G.V. Krishna Rau, chairman of Coffee Board.

Karnataka and Kerala account for more than 90% of the country’s coffee production. The coffee industry follows the October to September annual calendar.

“We are surprised by the estimates," said Ramesh Rajah, president of Coffee Exporters Association. “If they come true, the exports could be down by 20% in volumes."

Coffee prices in India, which are already above international parity, would stay firm, he added.

India accounts for 4% of the world’s coffee production and exports. Indian coffee exports since January to 12 December were down 11%, to 213,000 tonnes against the year-ago period.

In value terms it was Rs1,864 crore. In May, after the blossom showers, or the period before the monsoons, the board had estimated coffee production to be in the 291,000 tonnes range.

Robusta, the bitter variety of coffee which fetches lower price, will see production drop by 11%, to 170,000 tonnes, while the Arabica bean, will suffer an 8% drop, to 92,500 tonnes.

“Kerala will see a 14.26% drop in output at 49,000 tonnes, while in Karnataka, which accounts for two-third of the country’s coffee production, the output would be lower by 10% at 191,000 tonnes," said Rau.