Commodity risk: Difference between revisions
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''Risk management''. | ''Risk management''. | ||
When commodities are part of a company’s core business or processes there can be exposures arising from either or both of: | When commodities are part of a company’s core business or processes there can be exposures arising from either or both of: | ||
1. Price fluctuations (commodity price risk); and | |||
2. Lack of availability of the commodity. | |||
Both of these risks are aspects of Commodity risk. | Both of these risks are aspects of Commodity risk. | ||
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* [[Derivative instrument]] | * [[Derivative instrument]] | ||
* [[Risk]] | * [[Risk]] | ||
Revision as of 13:32, 28 May 2013
Risk management. When commodities are part of a company’s core business or processes there can be exposures arising from either or both of:
1. Price fluctuations (commodity price risk); and 2. Lack of availability of the commodity.
Both of these risks are aspects of Commodity risk.
Commodity price risk - as defined above - may also arise from intentionally creating speculative positions in the physical commodity or (more commonly) related derivative instruments.
