Commodity risk: Difference between revisions
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1. Price fluctuations (commodity price risk); and | 1. Price fluctuations (commodity price risk); and | ||
2. Lack of availability of the commodity. | 2. Lack of availability of the commodity. | ||
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.
