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NEW YORK, Jan 22 (Reuters) - Starbucks Corp has fixed the price it will pay for most of its coffee beans this year after going on a buying spree late last year when prices were under pressure, Chief Financial Officer Scott Maw said on Thursday.
The move reflects a strategy by major coffee buyers to protect against potential spikes in arabica coffee prices amid concerns over prolonged dry weather in top grower Brazil and the impact of leaf disease in Central America.
Maw said Starbucks has now fixed prices on 94 percent of its coffee needs for 2015 after buying a “significant” amount of coffee in the last six weeks of 2014. The company said in October it had covered two-thirds of its bean needs for 2015.
The purchases came as the price for front-month arabica coffee on ICE Futures U.S. fell as low as $1.64 a lb on Dec. 31 from more than $1.90 a lb in late November.
Maw said that, over the last year, Starbucks has tended not to buy coffee when the price exceeded $1.90 a lb.
He has not seen any indication that bean supplies have been disrupted, but opportunity buying under $1.90 might indicate the world’s roasters are preparing for a sustained period of high prices.
That level is well off the 2-1/2-year highs above $2.20 seen in October last year, but is still well above historic averages.
“We don’t see or hear anything that indicates a slowdown in supply,” Maw said. “Everything indicates that the coffee market is still healthy in origin.” (Reporting By Lisa Baertlein; Writing by Luc Cohen; Editing by Meredith Mazzilli and Andre Grenon)