Coffee stocks gain on FDI hopes

MUMBAI: Coffee stocks today ended with up to 7 per cent gains as the government is considering allowing foreign direct investment ( FDI) in coffee plantation sector.

Shares of Tata Coffee soared 6.80 per cent, while CCL Products gained 3.52 per cent, Tata Global Beverages climbed 2.40 per cent and Bombay Burmah rose 1.37 per cent on BSE.

A proposal to this effect is under consultation of the Commerce and Industry Ministry, sources said.

Currently, 100 per cent foreign investment is permitted through the government approval route in the tea plantation sector. However, FDI is not allowed in any other plantation sector or activity.

According to sources, foreign players could be allowed to engage in rubber and coffee plantation, bring in labourers in plucking of coffee beans or collecting latex from rubber trees and processing of the raw material.

Permitting foreign investment will also help India reduce import bill of rubber and boost India's coffee exports, the sources added.