The highest premium for arabica coffee, favored by Starbucks Corp., over the robusta variety in two years is fueling speculation roasters will boost purchases of the cheaper variety used to make instant drinks.
Robusta coffee fell in London to the lowest since January as bearish technical indicators added to speculation supplies are ample in Vietnam, the world’s biggest grower of the variety, and Indonesia. Sugar rose.
The premium robusta coffee for delivery in January commands over the March futures climbed to a record, signaling tightening supplies as shipments fall from leading producer Vietnam and stockpiles dwindle. Cocoa dropped.
The coffee crop in Vietnam, the world’s largest producer of the robusta variety, will be 9.5 percent higher than a previous estimate in the season started last month, according to researcher CoffeeNetwork.
Raw sugar rose in New York, erasing a decline, after Pakistan formed a panel to report on imports of the sweetener to alleviate a shortage estimated at 1.2 million metric tons next year. Coffee also climbed.