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CPOs see prolonged drought-related commodity price hikes
Story Date: 11/27/2012
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Source: Tom Johnston, MEATINGPLACE, 11/26/12
Eighty percent of chief procurement officers at food and beverage companies believe that drought-related commodity price increases will last more than a year, according to a report released by global management consulting firm A.T. Kearney.
The report, titled "Managing Supply in Volatile Agriculture Markets," summarizes the results of a survey of food and beverage company chief procurement officers. The survey focused on how these executives and their companies are managing commodity risk in the face of rising commodity prices.
The CPOs in the survey do not expect commodity volatility to be a short-term phenomenon given global weather factors and increases in global demand for high-protein diets, geopolitical conflicts and demand for biofuels.
"The survey results indicate that although financial hedging is widely used among consumer packaged goods companies, other initiatives are needed to plan for and mitigate volatility in agricultural commodities," Dave Donnan, A.T. Kearney partner and study co-leader, said in a news release.
To read the full text of the survey, visit www.atkearney.com.
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