Commodity risk

This article relies largely or entirely on a single source. Relevant discussion may be found on the talk page. Please help improve this article by introducing citations to additional sources. Find sources: "Commodity risk" – news · newspapers · books · scholar · JSTOR (May 2010)

Categories of
Financial risk
Credit risk
Settlement risk Concentration risk Sovereign risk Default risk
Market risk
Interest rate risk Inflation risk Currency risk Equity risk Commodity risk Volatility risk Systemic risk
Liquidity risk
Refinancing risk Deposit risk Margining risk
Investment risk
Model risk Execution risk Valuation risk
Business risk
Reputational risk Operational risk Country risk Political risk Legal risk Moral hazard
Profit risk
Non-financial risk
Stranded asset
v t e

Commodity risk refers to the uncertainties of future market values and of the size of the future income, caused by the fluctuation in the prices of commodities.^[1] These commodities may be grains, metals, gas, electricity etc. A commodity enterprise needs to deal with the following kinds of risks:

• Price risk is arising out of adverse movements in the world prices, exchange rates, basis between local and world prices. The related price area risk usually has a rather minor impact.
• Quantity or volume risk
• Cost risk (Input price risk)
• Political risk