When an overseas supplier asks for a price increase, start with the exchange rate under that contract. It has moved since the price was set. Find out what that move did to the supplier's costs before you respond to the ask.
The dollar has not moved the same way against every currency. As of July 31, 2026, it bought about 9% more Indian rupees than a year earlier, while the yuan appreciated close to 7% against it. An Indian supplier that pays its people and materials in rupees and invoices you in dollars now collects more rupees on the same invoice. A Chinese supplier in the same position collects fewer yuan. Same dollar, opposite economics.
Where those costs are local and unhedged, that move lands in the supplier's margin without anything in your contract changing. No one negotiated or announced it. Then the increase request arrives, priced as if it never happened.
The question is not whether the dollar is strong. It is what happened in this supplier's currencies since you priced the contract, and how much of its cost base that touched. Answering it takes five things:
None of that is exotic. In one completed engagement, an aftermarket truck-parts distributor captured $10M in annual COGS savings, 10% of direct-material spend, through global sourcing consolidation across 15,000 SKUs. Currency was not the variable we were solving for there. The discipline was the same one: establish what the inputs actually cost before accepting the number in front of you.
Sometimes the answer is that the increase is fair and you should pay it. A supplier exposed to a 7% adverse move is not inventing a problem. My position is that the buyer should be the one who knows that first.
The harder case is the hedged supplier, where the spot rate has moved but realized economics haven't changed yet. Do you require suppliers to show how hedging affects a currency-driven ask? I have not seen a consistent standard.
For a single portfolio company, an unchallenged increase does not cost you once. It resets the baseline for every budget, negotiation, and EBITDA bridge that follows.
For a sponsor, it repeats. Every portfolio company sourcing overseas carries a version of the same exposure, and each one negotiates it alone, on its own information. Ten portfolio companies facing the same currency move is not ten separate supplier problems. It is one exposure, priced ten different ways, with nobody looking at it in aggregate.
Start with your ten largest overseas contracts. Pull the pricing date and the currency move since. Half a day tells you which conversations deserve scrutiny.
If you would rather not run it yourselves, or you want it done across a portfolio rather than one contract at a time, that is work we do. Message me.
Treya Partners is a procurement value creation firm for mid-market PE. $108M+ in savings for 80+ PE firms and 240+ portfolio companies across 150+ spend categories, from small parcel to direct/COGS, through GPO programs and benchmark data, with minimal disruption.