The Ultimate Coffee Glossary

Forward Contract (Forward)

Forward Definition

A Forward Contract is an agreement to purchase coffee that has not yet arrived. Experienced coffee roasters with a substantial purchase history may be offered the opportunity to contract for coffees that have not yet arrived in the country. This means that the roaster agrees to purchase the coffee at a future date for a price established when the contract is created, effectively fixing the price and owning the coffee. Understanding the concept of Forward Contract and its role in coffee trade and logistics is important for coffee industry professionals, buyers and investors.

Explained in simple terms

A Forward Contract is when someone agrees to buy coffee that hasn't come yet. It's like making a promise to buy a coffee that you haven't seen yet, but you know the price and you know you want it. Some coffee roasters might do this if they really like a certain type of coffee and they want to make sure they can buy it later even if the price changes.
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