NEW YORK - Coffee's biggest slump in three years may be ending as weather damages crops from Colombia to Indonesia, reducing US inventories to the lowest since 2000.

Stockpiles in warehouses monitored by ICE Futures US fell 16 percent since December, declining for a fourth year, exchange data show.

Prices rallied 7.8 percent from a nine-month low in October as the heaviest rains in two decades damaged Central American plantations. Colombia reported a 19 percent drop in output last month, while exports slowed from Brazil, the world's top grower. The London-based International Coffee Organization (ICO) already expects production of arabica, the most-consumed variety, to decline 3.7 percent this year.

Global coffee production in the year ended Sept 30 will drop about 4 percent to 127.4 million 60-kilogram bags from a year earlier, the ICO said in a report on Nov 10. It had previously forecast 129.5 million bags and now anticipates declines in India, Indonesia, Vietnam, Brazil, El Salvador, Guatemala and Mexico.

Dry weather in Brazil from April to early October will curb gains in the harvest that starts in May, according to the Sao Paulo-based weather forecaster Somar Meteorologia. Marco Antonio dos Santos, an agronomist at Somar Meteorologia, cut his forecast for the nation's crop to 55 million bags from 58 million in a report on Nov 1.

Cooxupe, a growers' cooperative and Brazil's largest exporter, said last Thursday that its output will be 15 percent less than the previous on-cycle crop because of dry weather.

Colombia's National Federation of Coffee Growers cut its 2011 crop estimate by 5.9 percent on Nov 21 because of wet weather, after reducing its 2012 forecast on Nov 4 by 23 percent.

Brazilian exports fell to 3.09 million bags last month, from 3.49 million a year earlier, according to data from the nation's Green Coffee Exporters' Council. Shipments may drop to 3 million bags this month, compared with 3.18 million, Flavour Coffee, a Rio de Janeiro-based broker, said in a report last Thursday.

Global inventories will fall to 18 percent of demand, compared with 23 percent a year earlier and more than 40 percent in 2003, according to Keith Flury, an analyst at Rabobank International in London.

Inventories tracked by ICE Futures US were at 1.43 million bags on Tuesday, down from 1.7 million at the end of 2010 and a high three years ago of 4.64 million bags.

Starbucks Corp raised prices in US markets this month to help recoup higher commodity and rental costs, Alan Hilowitz, a spokesman for the company, said last Wednesday.

Global consumption expanded 2.4 percent to 135 million bags last year, after growing an average of 2.5 percent annually during the last decade, according to a Nov 10 report by the ICO.

Demand in the United States, the largest coffee-drinking nation, increased 2.7 percent during the year ended Sept 30, according to StudyLogic LLC, a market researcher. US consumers spent 18 percent more on coffee in September than a year earlier, Bureau of Labor Statistics data show.

"People still need their cup of Joe," said Samuel Nahmias, the chief operating officer of StudyLogic. "Whether people are employed or unemployed, they will still keep drinking coffee."

Bloomberg News