Commodity trading and risk management - Applying a successful approach to manage commodity risk in a volatile market

Download: Commodity trading and risk management

Significant commodity price volatility is a critical factor of business performance for users, producers and traders of commodities. More companies are now setting up Commodity Trading Risk Management (CTRM) functions to respond to the challenges and opportunities.

Traditionally companies have operated a decentralised or federated risk management, where commodity risks have been managed locally by different businesses and where the focus has been on risk transfer and avoidance. However, now there is a move towards centralising commodities risk management under an enterprise risk management model. There are cost savings and synergies to be found and risks are aggregated across all components of the business. This proactive risk management approach optimises the value of the underlying commodity which is core to their business performance.

In our publication Applying a successful approach to commodity risk in a volatile market, we review existing approaches based on a company’s appetite for risk and make recommendations for setting up a proactive enterprise risk model.

Our view of emerging cross industry standards in CTRM

Our view of emerging cross industry standards in CTRM

Our global network of over 200 CTRM specialists brings insights and knowledge of best practice to your CTRM challenges. We can support you with:

  • setting up the right risk strategy,
  • implementing trading processes and controls,
  • understanding the accounting tax and regulatory requirements
  • advice on the appropriate CTRM governance and control framework.

Contact us

David Coulon
Partner, Head of Commodity Management
Tel: +44(0) 7771 902 582
Email

Nicholas James
Director
Tel: +44 (0) 20 7212 6550
Email

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