Commodities broker and analyst StoneX Group Inc has expanded into the physical trading of commodities by adding a coffee business to its cotton trading operation, according to sources and official documents.
StoneX acquired the specialty coffee business in the United States from Mercon Coffee Corporation, the troubled coffee trader that filed for bankruptcy protection last year, according to documents in court proceedings in New York.
The acquisition includes the plant, equipment, inventories and the books of Mercon Specialty, a business that consists of sourcing fine coffees in producing countries and transporting the beans to the United States, where they are sold to local roasters.
It is the second major move by StoneX on the physical trading of commodities. The company acquired late in 2022 the cotton merchant CDI-Societe Cotonniere De Distribution S.A, based in Lausanne and with an office in Brazil.
StoneX main business continues to be market intelligence and price risk services, such as executing hedging strategies for traders, producers and processors of commodities around the world. The company did not return a request for comment regarding its expansion into physical trading.
Mercon Specialty's website is already redirecting visitors to the new website of StoneX Specialty Coffee.
A coffee trader working with a multinational group, who asked not to be named because he was not authorized to discuss the issue publicly, said the move by StoneX raised concerns among other traders who used to hedge positions with the company.
According to him, Neumann Kaffee Gruppe (NKG), one of the world's largest coffee traders, decided to close its accounts with StoneX following the deal in the specialty coffee sector in the U.S., where Neumann has a large operation.
"There is a clear conflict of interests between StoneX and its existing clients in the price risk services," he said.
Neumann said it will not comment on the issue at this time.