MANIZALES, Colombia (Dow Jones)–As Colombian coffee growers get set for the second and final harvest of the 2009-2010 crop year, hope is dimming that production this year will recover from three-decade lows.

Supply problems caused by two years of smaller-than-expected crops in Colombia have led to a shortage of premium coffee beans, and El Nino-related weather complications and pest infestations continue to limit the nation’s coffee harvest.

Harvesting of the Colombian mid-crop, also known as the mitaca, normally starts in earnest during the last half of April. Any notion that the mitaca–which typically accounts for between 40% and 45% of total Colombian coffee production–will change the supply situation has eroded.

“If it rains in the next two to three weeks we will have an acceptable harvest but we are not going to have a great mitaca, and broca remains a concern that at the current levels will affect the export volume,” said Juan Pablo Echeverri, manager at the important Hacienda Venecia farm in the heart of the Eje Cafetero region near the town of Manizales. Broca is an insect that damages the coffee cherry and make beans unfit for consumption.

The dwindling supply from Colombia, the world’s largest producer of top-quality mild washed arabica coffee, have contributed to a global shortage of premium beans while hurting Colombia’s most important source of employment and third-most important foreign exchange earner after oil and coal.

Colombia’s total 2009 coffee harvest ended at 7.8 million bags, down 32% from the prior year, according to the National Federation of Coffee Growers, or Fedecafe. The growers’ group said last week Colombia’s 2010 harvest has the potential to yield between 11 million and 12 million bags if weather allows for it.

That seems like a pipe dream to industry experts.

“Based on output in the first three months of the 2009-10 crop cycle, the high broca levels and the dry weather, Colombia is going to struggle just to reach 9 million bags from now until the end of the cycle in September,” said Judith Ganes-Chase, a commodities analyst who runs J. Ganes Consulting.

Fedecafe acknowledged last week that the broca infestation was running at between double and triple the normal levels in the last two months of 2009, owing to the effects of erratic weather during most of the past 12 months that prevented producers from controlling the spread of the pest.

Producers in the Eje Cafetero region, which accounts for about a quarter of Colombian coffee production, have reported the highest infestation levels ever known. An average of 10% to 12% of all coffee was damaged by broca in the main 2009-10 harvest, for which picking now has been completed. Ahead of the mid-crop harvest, the issue is far from resolved.

Echeverri said in an interview that pest levels ahead of the mitaca should be closer to 1% to have a broca-free harvest, but is running at a much higher 3.5% to 4%.

Meantime, weather for the mitaca harvest in the southern region, which accounts for about one-third of Colombia’s coffee output, has been a lot less favorable than what the industry had hoped for. With beans still in formation, the already-prolonged dry-spell is raising concerns among growers.

“The beans are very vulnerable to any effects of adverse weather at this stage, with the cherries are not fully developed yet, and with too long a period of rain scarcity, the beans will become undersized and start turning black,” said an official at the national coffee research center Cenicafe.

By the end of December, rainfall in the southern region had been coming in at less than half of normal levels for that month, according to Cenicafe data.

International analysts say Colombia in the best of cases now can hope for a healthy flowering for the 2010-11 crop cycle.

“The situation is bad and even if the mitaca sees slightly better numbers than last year at best we could see unchanged production from last year,” Ganes-Chase said.

-By Maja Wallengren , Dow Jones Newswires; mwallengren@hotmail.com