Cargill's risk management tools help customers manage cocoa price volatility
CocoaPacer, CocoaPacer Cap and CocoaRange Cap are designed to help protect customers from volatility when pricing their cocoa ingredients.
Cargill’s cocoa and chocolate business has launched three new tools in its portfolio of Price Risk Services to help customers more easily manage price risk.
CocoaPacer, CocoaPacer Cap and CocoaRange Cap are designed to help protect customers from volatility when pricing their cocoa ingredients. For example, they can offer protection within ingredient purchase contracts against sudden increases in cocoa prices, yet preserve the potential benefit of a discount if the price falls before physical shipment.
In a press release, Customer Risk Manager Tom King said, “Cargill has been trading agricultural commodities around the world since 1865, so managing price risk is part of our heritage and a strength we can share with our customers to help them become even more successful. Our CocoaPacer, CocoaPacer Cap, and CocoaRange Cap products are the latest addition to our -‘family-’ of risk services. They are straightforward, transparent and can be clearly explained – so customers spend less time and energy debating an array of risk management decisions. These pricing structures are embedded in existing physical contracts of our customers.”
“Because of continued cocoa price volatility, many food manufacturers are coping with extraordinary uncertainty when managing price risk exposure to cocoa and chocolate ingredients. We feel that, by combining our risk management discipline with our knowledge of the cocoa and chocolate sector, we have developed a consistent and methodical approach to managing price risk that is of real benefit to our customers”, concluded King.