Market sits up and smells coffee

Tata Coffee hit a new 52-week high today at Rs.107.35 with an over 3 times surge in volumes. CCL Products, another coffee and tea maker also hit  a new high at Rs.253.90 with an over 2 times rise in volume. Bombay Burmah Trading and Tata Global Beverages are also strongly up in the green.

This spike up of interest on specifically coffee stocks is on hopes that the Govt might allow FDI in coffee plantations. There are murmurs in the corridors of Delhi that this proposal is being considered by the commerce and industry ministry. 100% FDI is currently allowed in tea plantations but not in anything other plantations.

The news doing the rounds is that foreigners could be allowed to invest in these coffee plantations, get labourers to pluck coffee beans, process raw material and thus help in boosting India’s coffee exports. Currently, for 2014-15 (Oct to Sept), coffee output is targeted at 3,31,000 tonne v/s 3,04,500 tonne last year. And in terms of value, exports earned US$803 million v/s US$799 million in previous year.