Starbucks pares hedging programme despite coffee market surge

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Buyer of 3 per cent of world’s coffee holds less than $200mn in fixed-price contracts, down from $1bn in 2019

Starbucks has slashed its use of hedges against coffee price shocks even as the price of beans has soared, raising concerns that it may be unusually exposed to market swings. The world’s largest café chain held less than $200mn worth of fixed-price contracts for so-called green, or unroasted, coffee at the end of its fiscal year in September, according to its newly filed annual report, down from $1bn as recently as 2019.

The company buys green coffee using two types of contracts: fixed-price and price-to-be-fixed, according to its annual report. For the latter, the company also uses derivatives contracts to insure against market gyrations. “Like others, right now we’re remaining agile in a very dynamic market,” Starbucks said in response to questions. “An example of that agility is that our current priced coverage is slightly lower than our typical range of 9-18 months.

 

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Belgique Dernières Nouvelles, Belgique Actualités

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