* Colombia strike vote drives up Q2 swaps
* S African coal makes modest gains as another April cargo is booked
* Indian output far below target, underlines need for more imports
LONDON, Jan 29 (Reuters) - Physical coal prices edged higher on Tuesday but the main movement came in the swaps market, which rose following news that Colombian miners voted to go on strike, threatening shipments from the world's fourth-largest exporter.
South African coal for April delivery changed hands at $86.50/tonne based on 100,000 tonnes of trade, up from $86.25 at the previous close according to data from brokers.
No volume was reported in other South Africa contracts.
European coal into Amsterdam/Rotterdam/Antwerp (DES ARA) for delivery in March was bid at $87.10 and offered at $87.50, compared with a previous settlement of $87.75/tonne.
"The main action was in the swaps today as the possibility of a strike in Colombia was clearly the biggest news story for traders," said one buyer of coal for a European utility.
The API2 swaps contract for Q2 2013 delivery rose $0.65 to $90.80/tonne after a vote by workers this afternoon at Colombia's biggest coal exporter Cerrejon to strike over a salary dispute.
Coal swaps for 2014 delivery traded at $100.35, down $0.35 in illiquid trading. The 2014 swaps were moving in line German power which fell on Tuesday.
Unions often use the threat of a strike to pressure companies into better deals for workers, and cannot walk off the job immediately.
Cerrejon, a joint venture between BHP Billiton, Anglo American and Xstrata, exported 32.8 million tonnes of coal last year, 2.5 percent above its target.
Gains in coal came as Brent crude prices sent out bullish signals, with the front-month oil contract priced at $114.05/barrel after strong U.S. economic data and ongoing Middle East tension supported prices.
But further weakness in German power prices was testament to brittle confidence in Europe's most influential electricity market, where prices have fallen 10 percent this year amid plentiful supply and patchy demand.
German baseload power for 2014 delivery hit an intraday low of 40.90 euros/megawatt-hour, close to a contract trough of 40.75 euros seen last week.
Traders were responding to weakness at the front of the curve, where unseasonably mild weather and plentiful wind power drove down prices.
Front-year German baseload power prices are near their lowest levels since mid-2005.
But coal swaps prices since last week have made gains following a technical correction, signs of restocking in physical markets and disruption to mining and coal transport in Australia's east coast following a cyclone.
The likelihood that India will have to import more coal this year was underlined by production data on Tuesday, which showed that the country's mines have only produced two-thirds of output targeted for the 2012-2013 fiscal year that ends in March.
Analysts say India will be increasingly key to driving prices for physical coal this year, as utilities in the world's second-largest importing nation decide what ratio should come from Pacific producers such as Indonesia and from South Africa.