Saturday, December 01, 2012

80 Percent of CPOs Believe Drought-Related Commodity Price Increases Will Last More Than a Year: A.T. Kearney Study

Food and beverage companies are looking for risk management strategies beyond hedging to manage commodity volatility

14 November 2012 (Chicago)—Today global management consulting firm A.T. Kearney released a report, Managing Supply in Volatile Agriculture Markets that summarizes the results of a survey of food and beverage company chief procurement officers (CPO). The study focused on how these executives and their companies are managing commodity risk in the face of rising commodity prices.

Although there is a well-known spike in agricultural commodity prices due to the recent drought in North America, the CPOs in the study do not expect commodity volatility to be a short-term phenomenon given global weather factors—hurricanes, tsunamis, floods, or drought—as well as increases in global demand for high-protein diets, geopolitical conflicts, and demand for biofuels.

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