Hedging their beans: U.S. coffee roasters swoop as prices drop

viernes 20 de marzo de 2015 13:49 GYT

* Graphic on hedging: here

By Luc Cohen

NEW YORK, March 20 (Reuters) - U.S. coffee roasters, still reeling from a sudden price spike a year ago, took advantage of the recent tumble in the arabica market to fix prices farther into the future than they have in more than three years, roasters and traders said.

The extensive forward coverage reflects a new, more cautious buying strategy from roasters amid increasingly volatile futures prices as farmers in top grower Brazil prepare to harvest a crop many fear has been hurt by last year's drought, according to interviews with seven U.S. roasters and eight U.S. traders.

The recent drop in prices has even attracted small-scale, specialty roasters, like Milwaukee-based Anodyne Coffee, which had never purchased a futures contract until February.

Steve Kessler, Anodyne's director of wholesale operations, said the company hedged about a quarter of its annual needs late last month.

"We're looking and saying okay, this is a manageable (price) level," he said. That covered large-volume purchases for the company's blends, although he still buys his premium beans with shorter-term commitments, often 90 days ahead, he said.

Earlier this month, prices hit $1.288 per lb, their weakest in just over a year, after a month-long drop as speculators exited long positions on reports of rain in Brazil.

Last week's U.S. Commodity Futures Trading Commission's weekly Commitment of Traders report showed commercial players, including roasters and traders, held their biggest long arabica futures position on ICE Futures U.S. on records going back to 2006.   Continuación...