What is Price to be Fixed (PTBF) in green coffee trading?

Price to be Fixed - commonly abbreviated PTBF or PBF - is a contract structure where the final price of the green coffee is not agreed at the time of signing but is instead linked to a future C-Market price. The buyer and seller agree on a differential (a premium or discount above or below the C-Market) but leave the actual base price to be determined later, typically when the buyer instructs the seller to "fix" against a specific futures contract date.

For example: a buyer contracts a Colombian lot at "+45 cents over C, PTBF." The differential is locked; the C-Market component floats. When the buyer decides to fix - perhaps when they believe the market is at a favourable level - the price is calculated as: the C-Market price on the fixing date + 45 cents per pound.

PTBF contracts allow buyers to speculate on or hedge against C-Market movements. If you fix when the market is low, your total cost is lower; if you fix when it's high, you pay more. This flexibility comes with complexity and risk - you need to actively monitor the market and have a view on where prices are heading. Most new roasters are better served by fixed price contracts until they have a clear understanding of how the C-Market moves and how their business is exposed to it.