June 19 (Bloomberg) -- India’s coffee output, the third- biggest in Asia, will increase 17 percent to a record next season after summer rains over the nation’s main growing region boosted crop prospects, the state-owned Coffee Board said.

Production will climb to 306,300 metric tons in the year beginning Oct. 1, compared with 262,300 tons forecast for this year, the agency said in its so-called “post-blossom” estimate. The harvest will include 204,775 tons of robusta beans and 101,525 tons of arabica, the board said in an e-mailed statement.

Increased supplies from the South Asian nation, which exports 80 percent of its production, may extend a 36 percent drop in robusta prices in London in the past year. The bitter- tasting bean is used in instant coffee. India’s previous record production was 301,200 tons in the 2000-01 season.

“The crop is in good shape after the plantations received well-distributed summer rains before and after the blossoms,” D.R. Babu Reddy, an agricultural economist at the Coffee Board, said in a phone interview from Bangalore.

Robusta coffee for September delivery declined $1, or 0.1 percent, to close at $1,465 a ton on the Liffe exchange in London yesterday. The most-active futures earlier touched the lowest price since the contract started trading in January 2008.

India’s crop was damaged last year by heavy monsoon showers in the nation’s biggest coffee-growing state of Karnataka. The province is forecast to harvest 221,475 tons next season, 21 percent more than this season, the board said.

Kerala Production

The southern Indian state of Kerala, the second-biggest grower, may gather 59,550 tons of coffee compared with 55,775 tons this year, the agency said.

India, which counts Italy and Russia among its biggest buyers of coffee, shipped 97,927 tons of the commodity between Jan. 1 and June 17, 20 percent less than a year earlier, preliminary export data from the Coffee Board showed.

A bigger crop may help the nation reverse the declining trend in shipments, G.V. Krishna Rau, chairman of the Coffee Board said June 9. Exports may reach about 200,000 tons in the year to March, the same as a year earlier, he said.

Traders in Vietnam, the world’s second-biggest coffee producer, said this week the Southeast Asian nation’s crop had been aided by June rains, which helped fruit production.

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

Last Updated: June 19, 2009 02:52 EDT