Coffee is in news today. News is that global Arabica and Robusta coffee futures have fallen over the past two weeks amid weakening global demand, better-than-expected harvests in Brazil and Vietnam, and a strong US dollar pressuring soft commodities. There is also slower consumption recovery in Europe and China post-recessionary fears. Inventory is piling up as roasters delay purchases anticipating further drops.

What does all this mean for the listed coffee sellers? Tata Consumer, which holds Tata Coffee is sitting perky as lower raw coffee bean prices support margin expansion in the coffee vertical. Tata Coffee exports bulk coffee; realization may dip but cost efficiency in retail is a plus.

On the other hand, CCL Products will have a mixed bad as lower procurement costs aid margins, but export pricing may come under pressure. FX volatility is a factor though instant coffee capacity utilization remains strong.

And the café’s like Devyani International (Barista) and Coffee Day Enterprises (CCD) will not really have any distinct advantage as such. For chains like these, lower input prices don’t meaningfully help.

Tata Consumer is a good, steady gainer today, rising 4% to an intraday high at Rs.1104.80 though profit booking has brought the stock down to Rs.1073.50, up just 1%.