Your Competitor Is Your Counterparty. Your Supplier Told Them Your Price.
Quote from chief_editor on June 8, 2026, 5:30 pmCommodity suppliers who sell to multiple buyers in the same market have visibility into the purchase prices of competing buyers. This information flows in both directions.
Two competing buyers of Brazilian coffee arabica — both European roasters purchasing from the same São Paulo exporter — were each convinced they had negotiated favorable prices from the supplier. Buyer A believed they had secured an advantageous discount versus market. Buyer B similarly believed their relationship gave them access to below-market pricing. Both were buying from the same exporter. Both deals closed within two weeks of each other.
The exporter knew both prices. The exporter knew the margins and the commercial pressures of both buyers because both had disclosed enough in negotiations to make their position clear. Whether the exporter used this information actively — communicating each buyer's price to the other, or simply using the knowledge to maximize their own position — is almost impossible to establish. The information asymmetry existed regardless.
In physical commodity trade, the supplier who sells to multiple competing buyers has market intelligence that none of those buyers have individually: the full range of prices being paid in the market for their specific commodity from their specific origin. This intelligence is the commodity equivalent of a central limit order book — the supplier sees all the bids, while each buyer sees only their own.
The Supplier's Information Position Is Structural, Not Accidental
A commodity producer or exporter who sells to ten competing buyers in the same market has, at any given time, more accurate information about the current market price for their commodity than any individual buyer. They know what each buyer is willing to pay, they know which buyers are under supply pressure, they know which buyers are price-sensitive and which are specification-sensitive. They did not acquire this information through any unfair means — it was disclosed to them voluntarily by each buyer in the course of negotiation.
This information position is structurally advantageous in pricing negotiations. A buyer who negotiates with a supplier and believes they are negotiating against the supplier's cost of production and desired margin is negotiating against an entity that also knows what every competitor is paying. The supplier can calibrate their ask for each buyer individually, based on intelligence that buyers cannot access.
Industry estimates for the frequency of this information asymmetry in commodity markets suggest it is universal rather than exceptional — any supplier who sells to multiple buyers is in this position. The degree to which suppliers use this information varies. Large, well-managed suppliers with formal sales processes typically maintain information barriers between customer accounts for competitive and legal reasons. Smaller, relationship-driven suppliers in markets where sales are handled by individuals who know all the buyers personally may operate with less formality about information flows.
The Protection Is Not Confidentiality — It Is Information Management
Buyers who want to reduce their price information exposure to suppliers should think about what they disclose in negotiations. The amount of information disclosed in price negotiation — how much margin the buyer is making, what their cost of alternative supply would be, how urgently they need the cargo — all contribute to the supplier's picture of the buyer's reserve price.
Professional commodity buyers in large organizations often conduct negotiations through purchasing teams who have specific mandates and limited authority to disclose commercial context. The negotiation is more transactional and less relationship-driven. The counterpart to this is that relationship-driven negotiations, where buyers and sellers have frank commercial discussions, tend to produce better quality supply relationships but also more information flow.
The structural response is not to avoid disclosing anything — that makes negotiations unproductive — but to be deliberate about what is disclosed and why. Disclosing supply urgency when you are not urgently constrained, disclosing competitor prices you do not actually know, or revealing margin information that changes the supplier's perception of your price sensitivity — these are forms of disclosure that work against the buyer's negotiating position without corresponding commercial benefit.
Commodity suppliers who sell to multiple buyers in the same market have visibility into the purchase prices of competing buyers. This information flows in both directions.
Two competing buyers of Brazilian coffee arabica — both European roasters purchasing from the same São Paulo exporter — were each convinced they had negotiated favorable prices from the supplier. Buyer A believed they had secured an advantageous discount versus market. Buyer B similarly believed their relationship gave them access to below-market pricing. Both were buying from the same exporter. Both deals closed within two weeks of each other.
The exporter knew both prices. The exporter knew the margins and the commercial pressures of both buyers because both had disclosed enough in negotiations to make their position clear. Whether the exporter used this information actively — communicating each buyer's price to the other, or simply using the knowledge to maximize their own position — is almost impossible to establish. The information asymmetry existed regardless.
In physical commodity trade, the supplier who sells to multiple competing buyers has market intelligence that none of those buyers have individually: the full range of prices being paid in the market for their specific commodity from their specific origin. This intelligence is the commodity equivalent of a central limit order book — the supplier sees all the bids, while each buyer sees only their own.
The Supplier's Information Position Is Structural, Not Accidental
A commodity producer or exporter who sells to ten competing buyers in the same market has, at any given time, more accurate information about the current market price for their commodity than any individual buyer. They know what each buyer is willing to pay, they know which buyers are under supply pressure, they know which buyers are price-sensitive and which are specification-sensitive. They did not acquire this information through any unfair means — it was disclosed to them voluntarily by each buyer in the course of negotiation.
This information position is structurally advantageous in pricing negotiations. A buyer who negotiates with a supplier and believes they are negotiating against the supplier's cost of production and desired margin is negotiating against an entity that also knows what every competitor is paying. The supplier can calibrate their ask for each buyer individually, based on intelligence that buyers cannot access.
Industry estimates for the frequency of this information asymmetry in commodity markets suggest it is universal rather than exceptional — any supplier who sells to multiple buyers is in this position. The degree to which suppliers use this information varies. Large, well-managed suppliers with formal sales processes typically maintain information barriers between customer accounts for competitive and legal reasons. Smaller, relationship-driven suppliers in markets where sales are handled by individuals who know all the buyers personally may operate with less formality about information flows.
The Protection Is Not Confidentiality — It Is Information Management
Buyers who want to reduce their price information exposure to suppliers should think about what they disclose in negotiations. The amount of information disclosed in price negotiation — how much margin the buyer is making, what their cost of alternative supply would be, how urgently they need the cargo — all contribute to the supplier's picture of the buyer's reserve price.
Professional commodity buyers in large organizations often conduct negotiations through purchasing teams who have specific mandates and limited authority to disclose commercial context. The negotiation is more transactional and less relationship-driven. The counterpart to this is that relationship-driven negotiations, where buyers and sellers have frank commercial discussions, tend to produce better quality supply relationships but also more information flow.
The structural response is not to avoid disclosing anything — that makes negotiations unproductive — but to be deliberate about what is disclosed and why. Disclosing supply urgency when you are not urgently constrained, disclosing competitor prices you do not actually know, or revealing margin information that changes the supplier's perception of your price sensitivity — these are forms of disclosure that work against the buyer's negotiating position without corresponding commercial benefit.