Robusta coffee prices have the most significant monthly gains in a decade amid signs that the COVID-19 pandemic is stimulating demand.
Nestle SA reported higher sales amid strong demand for coffee in home offices. Sales of its Starbucks-brand coffee products rose more than 10%, while Nespresso had mid-single-digit growth.
Robusta coffee futures have surged about 16% in London this month, the biggest gain for a most-active contract since June 2010 amid a shift toward home coffee consumption.
Worldwide lockdowns that shocked coffee shops, restaurants and offices have supported the demand for robusta beans, typically favoured to brew instant coffee at homes.
Nestle results provide confirmation at-home sales is doing very well. It was priced in to some extent, based on IRI data from the U.S., but this is more global.
Carlos Mera, an analyst at Rabobank in London
According to Rabobank, Robusta spreads have firmed up, and its certified stockpiles have fallen to the lowest since the start of last year.
Critics covering their contrary positions have also helped prices surge in recent weeks. Smaller robusta crops expected in Brazil and Vietnam in the 2020-21 season are also optimistic for prices.
Robusta futures for September delivery rose 2.4% in London to $1,376 a ton. In New York, Arabica coffee for September delivery increased by 3.4%.
