Cargill introduces three risk-management tools

Cargill has launched three new tools in its price risk services portfolio: CocoaPacer, CocoaPacer Cap and CocoaRange Cap. These are designed to help protect customers from volatility when pricing their cocoa ingredients. The tools complement the traditional pricing approaches currently used by the company’s customers. They likewise offer an additional approach to managing price risk at the stage of sourcing ingredients. An important feature of this approach is to provide customers with a hedge benefit, to manage uncertainty and anxiety that goes with making a traditional pricing decision.

Customer risk manager Tom King explains the reason for this facility: “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 Mr King.

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