Mild Arabicas ended 4.94 cents higher at 153.33 cents/lb, while Other Mild Arabicas added 4.92 cents to 148.80 cents/lb. Brazilian Natural Arabicas rose from 130.57 cents to 136.08, and Robustas experienced only a marginal increase from 109.39 cents to 109.90.

The Colombian government and the country's truck drivers finally reached an agreement to end the two-week-long strike that had slowed coffee exports. The strike has left a backlog of more than 300,000 60-kg bags of coffee waiting to be shipped, according to the National Association of Coffee Exporters. The country exported 836,000 60-kg bags of coffee in July 2008, down from 947,000 bags shipped the same month last year. Total exports in the first ten months of 2007/08 (Oct/Sep) are, however, still up by 7.1 % from last year, at 9.92 mln bags. Coffee production in July 2008 was also down on the year at 891,000 bags compared with 995,000 in July 2007.

Meanwhile, Agriculture Minister Andres Felipe Arias announced that the country plans to increase coffee production to 17 mln 60-kg bags by 2014/15 from the current 12.2 mln by way of a rise in yields instead of an expansion of growing areas. In order to achieve the target, coffee growers, researchers and suppliers will receive $724.5 mln in cash between 2008 and 2011.

Brazil's 2008/09 coffee harvest made progress, but still remains far behind schedule. Farmers had harvested 78% of the crop as of August 23, up from 75% as of August 19, but down from 96% at the same date last year. The arabica crop was 71 % harvested by August 23, compared to 95% last year.

The South of Minas Gerais, the country's main arabica producing region, is reportedly the most worrying region, with the most severe problems regarding labour shortages as farm owners are having to compete with labour from the ongoing sugarcane crop, as well as better general economic conditions, allowing for non-faun jobs for many labourers; If the crop takes too long to be harvested, it is possible that the September flowering season will knock off what remains of the unripened coffee cherries. In that case, Brazil could end up harvesting less than the market initially expected. According to local consultany Safras & Mercado, the bulk of the 2008/09 coffee harvest will be completed by early October, though the likelihood of rain in September could further delay the harvest.

Although harvesting is now more than three quarter's completed, coffee flows from Brazil's growing regions have been very low so far this season. This has caused many market participants to lower previous output expectations. In May, the state-owned National Commodities Supply Corp. (Conab) estimated Brazil would turn out 45.5 mln 60-kg bags of coffee in 2008/ 09. Private analysts and buyers had weighed in with higher estimates of 50 mln bags or more.

A lack of sales offers from several key origins, such as Brazil and Southeast Asia, restrained business in Europe's physical market. Trade in Colombian beans was muted despite the ending of the strike by truckers and despite strong interest in beans for prompt shipment. While differentials for near-tern shipments were still high, partly due to a lack of containers, business was mainly taking place for December shipment, traders said. Sales offers from Indonesia and Vietnam as well as Central America were also thin, with most suppliers being increasingly sold out. However, the industry seems to have good robusta cover and did not appear under pressure to buy, traders reported. Indonesian robustas had been in greater demand in Europe during August as the country's larger crop this year had provided a cheaper alternative to more expensive Vietnamese robustas.

India ,'y upcoming coffee crop is likely to be ready for harvest at the beginning of November, up to a month earlier than usual, due to the early blossoms and rains in Karnataka, one of the country's main coffee growing regions, the Indian Coffee Board said. According to a recent forecast by the Coffee Board, the upcoming harvest is likely to reach 293,000 tonnes, including 100,000 tonnes of arabica and 193,000 tonnes of robusta, up by 11.83% from this season.

Vietnam s coffee exports in August 2008 are estimated at I mln 60-kg bags, up from 750,000 in the same month last year. That brought total exports in the first eleven months of 2007/08 to 15.6 mln 60-kg bags, down by 19.1 % from 19.3 mh1 bags in October/August 2006/07.

IN Africa, The Ugandan government has warned of flooding and landslides in the country's major coffee producing areas over thenext two months after meteorologists had alerted the goverments that eastern and southwestern regions of the country would receive abnormally heavy rainfull. last year floods destroyed thousands of hectares of crops in Eastern and northen Uganda.

Members of the International Coffee Organisation (ICO) exported 7.973 mh160-kg bags of coffee in July 2008, 3.6% less than the 8.312 min shipped the same month in 2007. That brought total exports in the first ten months of 2007/08 (Oct/Sep) to 79.344 mln bags, 4.2% less than the 82.835 mln exported the same period in 2006/07.

The latest Commitments of Traders showed that noncommercial investors reduced their net long position in the "C" coffee contract to 13,430 lots as of August 26 from 17,375 on August 5. Small speculators (non-reportables) increased their net long position to 3,699 lots from 230 over the same period, resulting in a minuscule adjustment of the commercial net short position to 17,129 lots as of August 26 from 17,588 three weeks earlier.

In summary, the market rallied to a two-month high in the period under review as it drew support from the combination of a weak dollar and hurricane Gustav heading toward the Gulf of Mexico. Forecasters cautioned that Gustav could have been the first major stone to threaten coffee stocks in Gulf ports since hurricanes Katrina and Rita in 2005, which had caused some damage to stocked coffee in the New Orleans and Louisiana area. Market participants are now trying to assess what if any damage was done to the ICE certified coffee stocks by Gustav, which made landfall in the area on September 1. Despite the rise in prices in the run-up to Gustav's landfall, many Brazilian coffee producers were still waiting for better prices and for news about the country's coffee subsidy program Pepro, which is expected to be finalised when Brazil's Coffee Policy Deliberation Committee meets on September 4.