Commodity risk

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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