(Bloomberg) -- Robusta coffee prices headed for the biggest monthly gains in a decade amid fresh signs that the coronavirus 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, the company said on Thursday.
Read more: Nestle Outshines Rivals With Revenue Growth Led by Coffee
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 shuttered cafes, restaurants and offices have supported demand for robusta beans, typically favored to brew instant coffee at homes.
“Nestle results provide confirmation at-home sales is doing very well,” said Carlos Mera, an analyst at Rabobank in London. “It was priced in to some extent, based on IRI data from the U.S., but this is more global.”
Robusta spreads have firmed up and its certified stockpiles have fallen to the lowest since the start of last year. Speculators covering their negative positions has also helped prices rally in recent weeks. Smaller robusta crops expected in Brazil and Vietnam in the 2020-21 season are also bullish for prices, Rabobank said.
Robusta futures for September delivery rose 2.4% in London to $1,376 a ton. In New York, arabica coffee for September delivery jumped 3.4%.
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