Commodity risk

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.

See also

• Commodity
• Derivative instrument
• Location basis risk
• Risk