Economics
Arabica Premium Seen Higher on Robusta Supply Surge: Commodities
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The premium paid for arabica beans favored by Starbucks Corp. over the robusta used by Nestle SA may rally from a 20-month low because of a surge in supply from Vietnam, the biggest grower of the less costly coffee.
Arabica fell 18 percent in New York this year on prospects for a record Brazilian crop as robusta rose 13 percent in London because of fewer cargoes from Vietnam. The premium dropped to 83.89 cents a pound on March 29, the lowest since July 2010. It will widen to $1.162 by the end of the year, the average of 18 analyst estimates compiled by Bloomberg shows.