Coffee futures sank to a 21-month low on mounting concern that Europe’s debt crisis is eroding demand prospects as exporters boost sales in Brazil, the world’s largest grower. Sugar and cocoa also slid.
Coffee production for the smaller of two annual crops in Colombia, the world’s second-biggest grower of arabica beans, may fall 30 percent this year as rains damage trees, according to researcher F.O. Licht GmbH.
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.