July 24 Starbucks Corp, the world's
biggest coffee chain, has locked in coffee prices for 60 percent
of its 2015 needs and expects its full coffee costs for the year
to be close to 2014 prices, a company executive said on
"We have about 60 percent of our coffee price locked for
next year and those prices are roughly flat to this year, up
perhaps a little bit," said Starbucks Chief Operating Scott Maw,
, speaking on a conference call to discuss the company's
third-quarter financial results.
"Where we actually end up for the year, we still think it'll
be roughly neutral but will depend how we lock in that last 40
Coffee futures prices are notorious for their volatility but
this year, the benchmark contract on ICE Futures U.S. has been
more wild than usual.
Starbucks benefited from a 2-1/2-year downtrend that
bottomed out in late 2013. But in late January, an unprecedented
drought in top grower Brazil took the entire coffee industry by
surprise as the benchmark contract nearly doubled in price
within three months to a 26-month high above $2 per lb in April.
The contract has since fallen and finished the April-June
quarter down about 5 percent.
"Next year, we expect commodity cost to be roughly neutral
or have a minor unfavorable impact," Maw said, referring to the
company's fiscal year that begins in October.
A July 23 Reuters poll of 26 traders, roasters and analysts
forecast the ICE spot arabica futures contract a will end
2014 at $1.80 per lb, up just 1 percent from Thursday's
(Reporting by Marcy Nicholson; Editing by Cynthia Osterman)