Risk of Price Fluctuations in Imported Products

「The foreign exchange market, which affects our group's performance, began the period at the ¥158 range to the US dollar. From late April to May, the yen strengthened and the dollar weakened temporarily to the mid-¥155 range due to the effects of foreign exchange intervention by the Bank of Japan. The dollar subsequently strengthened and the yen weakened again, reaching the ¥162 range at the end of June, the highest level since 1986.」

「To hedge these market risks, we enter into forward exchange contracts and coffee futures transactions, maintain multiple sourcing countries and pass costs through to selling prices. However, if market fluctuations are exceptionally sharp or irregular and we are unable to fully pass through cost increases, including the costs of hedging, to selling prices, this may affect our Group's performance.」

「However, prices recovered amid increasingly tight supply and demand, rising to the 420-cent range, and highly volatile trading continued.」

「Coffee prices started the period at 389.05 cents per pound. Following reports that U.S. President Trump would impose tariffs, speculative selling accelerated and prices briefly fell below 300 cents. However, prices recovered as risk sentiment improved, rising to the 420-cent range and resulting in extremely volatile trading. Thereafter, downward pressure from expectations of a recovery in Brazil's production competed with upward factors including U.S. tariff policy, tight inventories and weather risks, and prices continued to move unstably at elevated levels, reaching 374.85 cents at the end of September.」

「In the coffee industry, Arabica coffee prices started at 191.80 cents per pound and temporarily rose to the 240-cent range in mid-April before falling to the 190-cent range partly as speculative positions were unwound. However, in addition to the continuing global undersupply of Robusta coffee, concerns about weather in Brazil drove prices above 250 cents in August, and they reached 270.25 cents at the end of September.」

「At our company, both net sales and profit progressed steadily as demand in the food-service industry recovered and we passed higher purchase prices caused by the weaker yen through to higher selling prices.」

「Some subsidiaries were forced to report lower profit year on year due to deterioration in their earnings environment caused by the recent impact of coffee prices.」

「In the coffee industry, coffee prices started the period at 170.50 cents per pound and temporarily exceeded 200 cents due to speculative activity. They subsequently declined because the harvest in Brazil, the world's largest producer, proceeded smoothly throughout the period and was expected to increase year on year, while concerns about weather were limited, reaching 146.15 cents at the end of September.」

「The exchange rate affecting our Group's performance started the period at the ¥133-per-dollar range. From May, the yen weakened further amid expectations of additional rate hikes following rate increases by the U.S. Federal Reserve Board (FRB), and the rate reached the ¥144 range at the end of June. In the coffee industry, prices started the period at 170.50 cents per pound and temporarily exceeded 200 cents due to speculative activity, but gradually declined as the harvest began in Brazil, the world's largest producer, reaching 159.00 cents at the end of June.」

「The dollar strengthened significantly and the yen weakened from the beginning of the period. Because our Group imports many of the products it handles, and in addition to this, coffee prices had been rising notably since 2021, we asked customers to cooperate with passing these increases through to selling prices. This increased net sales, but the pass-through was insufficient to fully cover the rise in purchase prices, forcing profit margins lower.」

「The exchange rate affecting our Group's performance started the period at the ¥122-per-dollar range. Expectations surrounding differences in U.S. and Japanese monetary policy strengthened the trend toward a stronger dollar and weaker yen, and the yen temporarily weakened to the ¥151 range. Toward the end of the period, expectations of a slower pace of U.S. rate hikes, together with the widening of the Bank of Japan's permitted range for long-term interest rates, contributed to the rate reaching the ¥132 range at the end of December. In the coffee industry, coffee prices started the period at 228.40 cents per pound and have repeatedly fluctuated sharply against a backdrop of concerns about frost and excessive or insufficient rainfall in Brazil, the world's largest producer, forecasts for the harvest, and global supply and demand. Prices rose to around 240 cents in August, but after falling below 200 cents in October, they moved between 150 and 170 cents, reaching 167.30 cents at the end of December.」

「The exchange rate affecting our Group's performance started the period at the ¥122-per-dollar range. Expectations surrounding the differences between U.S. monetary policy, which was rapidly moving toward higher interest rates, and Japan's continued monetary easing strengthened the trend toward a stronger dollar and weaker yen, with the rate reaching the ¥144-per-dollar range at the end of September.」

「In response to higher raw material procurement costs caused by soaring coffee prices and the weaker yen, we proceeded with revisions to selling prices, resulting in higher net sales.」

「Particularly in the second half, selling prices did not fully cover the increase in costs,」

「In the coffee industry, prices started the period at 121.60 cents per pound and rose to the 160-cent range by the end of June. In the latter half of July, prices surged to the 207-cent range on concerns about a substantial decline in next year's production due to frost in Brazil's major producing regions. Although prices temporarily fell back to the 172-cent range in early August, concerns about reduced production due to frost and drought, as well as declines in stocks in consuming countries caused by disruptions to international logistics, drove prices above 200 cents again in early October. From mid-November, prices moved in the 220–240-cent range, briefly reaching the 249-cent range in early December, and stood at 226.10 cents at the end of December.」

「In the coffee industry, prices started the period at 121.60 cents per pound and generally moved in the 150–160-cent range through the end of June amid an upward trend. In the latter half of July, prices surged to the 207-cent range on concerns about tight supply following widespread frost damage in Brazil, the world's largest producing country. Although prices temporarily fell back to the 172-cent range in early August, they remained in the high 180–200-cent range because of historically low rainfall in Brazil's major producing regions and persistent concerns about a global supply shortage next year, reaching 194.00 cents at the end of September.」

「Coffee prices started the period at 121.60 cents per pound. In addition to concerns about reduced production due to low rainfall in Brazil, supply concerns arising from declining international port logistics drove prices up to the 154–155-cent level in early May. The above concerns continued to prompt speculative buying, and prices generally moved in the 150–160-cent range, reaching 159.75 cents at the end of June.」

「Coffee prices started the period at 119.55 cents per pound and gradually declined. They then rose to the 134-cent range as speculators bought on concerns over supply disruptions caused by the spread of COVID-19 in producing countries and declines in certified stocks. Prices subsequently weakened following reports of rainfall in Brazil and fell as low as the 102-cent range, but buying regained the upper hand from around mid-November, and prices stood at 128.25 cents at the end of December.」

「Coffee prices started the period at 119.55 cents per pound and gradually declined. They then rose to the 134-cent range as speculators bought on concerns over supply disruptions caused by the spread of COVID-19 in producing countries and declines in certified stocks. However, as rainfall brought flowering to Brazil, where there had been concerns about drought, expectations for next year's production improved and prices gradually declined, reaching 110.95 cents at the end of September.」

「Coffee prices started the period at 119.55 cents per pound and gradually declined due to lower demand in consuming countries caused by COVID-19 and the depreciation of the Brazilian currency. Prices also continued to fall at times amid concerns about oversupply after the U.S. Department of Agriculture forecast that global coffee bean production in 2020–2021 would exceed consumption, reaching 101 cents at the end of June.」

「Coffee prices started the period at 94.50 cents per pound. Concerns grew over the impact of expected unfavorable weather in the major producing countries on production volumes, and prices gradually rose to 129.70 cents at the end of December.」

「Coffee prices started the period at 94.50 cents per pound. Concerns grew over the impact of unfavorable weather in the major producing countries on production volumes, and prices briefly rose to the 111-cent range before gradually regaining stability and reaching 101.15 cents at the end of September.」

「Coffee prices started the period at 94.50 cents per pound. Concerns grew over the impact of unfavorable weather in the major producing countries on production volumes, and prices gradually rose to 109.45 cents at the end of June.」

「Our Group handles imported products, and their purchase prices are affected by exchange rates and commodity prices, which fluctuate with political instability in sourcing countries, weather and crop conditions, and other factors.」

「Green coffee bean prices started the period at 118.15 cents per pound. Stable production in the major producing countries was expected, and prices moved within a narrow range. Influenced by higher production and a stronger dollar, prices briefly fell below 100 cents and stood at 101.85 cents at the end of December.」

「Green coffee bean prices started at 118.15 cents per pound at the beginning of the period. With stable production expected in major producing countries, prices moved within a narrow range before falling rapidly and briefly dropping below 100 cents, ending at 102.45 cents at the end of September.」

「Green coffee bean prices started at 118.15 cents per pound at the beginning of the period and gradually declined to 111.50 cents at the end of June, as stable production in major producing countries was expected.」

「Sales of prepared frozen foods temporarily declined due to soaring prices for chicken ingredients, but sales rose 20.7% year on year as the company focused on proposing its key chicken-processed products to existing customers, resulting in their adoption for year-end demand.」

「Green coffee bean prices rose from 127.45 cents per pound at the beginning of the period to a temporary high of 142.75 cents, but fell to 128.05 cents at the end of September as rainfall in producing countries promoted coffee-tree flowering and improved the outlook for next year’s harvest. Sales declined 9.8% year on year, as the temporary postponement of the launch of olive oil products due to soaring olive oil prices coincided with the switch to newly developed cheese products.」

「The New York market price of green coffee beans fell from 139.30 cents per pound at the beginning of the period to 125.70 cents at the end of June, as stable supply from producing countries was expected.」

「The New York market price of green coffee beans rose from 127.45 cents per pound at the beginning of the period to a temporary high of 174.35 cents amid concerns about the effects of adverse weather in producing countries, before falling to 137.05 cents at the end of December.」

「The New York market price of green coffee beans rose from 127.45 cents per pound at the beginning of the period to 151.55 cents at the end of September amid concerns about the effects of adverse weather in producing countries.」

「The New York market price of green coffee beans rose from 127.45 cents per pound at the beginning of the period and moved moderately during the first half, but concerns about the effects of adverse weather in producing countries drove the price to 145.65 cents at the end of June.」

「Our group handles imported products, and their purchase prices are affected by foreign exchange rates and commodity prices, which fluctuate due to political instability in sourcing countries, weather and crop conditions, and other factors.」