Coffee price shoots up

Price of Arabica coffee reacently reached a 13 years high of US$ 2.01 per pound(lb) and Robusta price has hit 19 years high.

The main reason for this jump in price has been:

(1) Exports from Brazil is adversly affected due to unfavourable weather and low inventories
(2) Columbia, which is world's 2nd biggest producer of arabica cofee faces concerns amidst pest atttacks and the current coffee output has dipped substantially.
(3) With adequate monsoon, Karnataka has prononced increase in coffee production.(79925 tonnes of Arabica and 1,39,700 tonnes of Robusta)
(4) Kerala also reported jump in production to 65,775 tonnes.
(5) Tamilnadu has seen decline in production to 16,500 tonnes.
(6) And India exports about 70% of its total production, primarily to Italy, Russia, Belgium and Spain.

With Arabica crop expected in November and Robusta crop expected in February, India can expect good gains with its curent and estimated future coffee output.

And stock prices are reacting accordingly. TATA Coffee's share price has jumped from Rs.427 in July 2010 to Rs.594 on 19th Nov 2010.

Those investors who donot own coffee estate need not worry. Just buy stocks like TATA Coffee and ride the coffee boom.