(Dow Jones Commodities News via Comtex) –Indian coffee prices continued to climb higher in the week to Thursday on strong demand for exports and tracking international prices.

Arrivals of the new arabica crop are slowly gathering pace and even robustas have begun to trickle in, traders said.

They said commitments to export around 5,000 tons of arabica have already been made, for shipment in January. However, growers seem to be holding back stocks in anticipation of further rises in international prices and as a result some shipments could spill over to February.

“This is a risky proposition because growers could lose money if world prices see a downward correction in the next few days,” said an exporter from Chikmagalur, a coffee growing hub in southern state of Karnataka.

Nevertheless there are several trade enquiries for shipments even from February onwards.

Indian exporters are now offering arabica coffee at a discount of 1.5 U.S cents a pound over futures contracts on the New York Board of Trade, while buyers are looking for a discount of 2.5 cents/lb.

“Differentials have tightened but we are still a cent away from buyers’ ideas,” said a trader in Bangalore.

Traders believe exports could get a major boost if international prices continue to rise as they have done over the last couple of weeks.

On the New York Board of Trade Wednesday, the March contract settled at $1.1065 a pound, up from $1.0700/lb last week. The May contract settled at $1.1285/lb, up from $1.0910/lb a week earlier.

India exports around 80% of its coffee output, and the country’s arabica coffee is offered at a discount against New York futures contracts. A rise in international prices generally scales up India’s coffee export prices.

India’s coffee marketing year runs from January to December. Arrivals of arabica begin by the end of December, while robusta are mostly harvested in February.

Nevertheless there have been some market arrivals of robusta and sales have also taken place for February and March shipments.

Indian robusta is being offered in the international market at a $190-$195/ton premium over the futures contracts on Liffe. On the other hand, buyers abroad are offering a premium of only $170/ton over Liffe for Indian robustas.

Liffe robusta coffee futures climbed to $1,228/ton in the most active March contract Wednesday compared with $1,188/ton a week earlier. January rose to $1,212/ton from $1,165/ton.

Thursday, Robusta Cherry AB, FOB Cochin, was offered around $1,440/ton, up from $1,400/ton last week. Arabica Plantation A was offered at $2,400/ton, compared with $2,300/ton last week.

-By Sameer Mohindru, Dow Jones Newswires; 91-11-2307-4020; sameer.mohindru@dowjones.com

(END) Dow Jones Newswires

01-05-06 1123ET