Businesses Benefit from Expert Guidance in Dealing with Price Risk in Commodity Markets


Posted December 8, 2017 by Flowebb

By ‘commodities’ we mean all and any commodity for which there’s a liquid market traded on an exchange (agricultural, livestock and meats, metals, energy, plastics, fats and oils, etc.).

 
Many organizations, whether they know it or not, face price risk caused by today’s volatile commodity markets. Any business that produces, trades, or indirectly consumes commodities or raw materials has profit margins that are vulnerable to fluctuating markets - especially those that are not able to pass on the change in input cost to their customers.

Businesses that thrive, on the other hand, carry out a balancing act that sees them get the commodities they needat favorable prices – delivering certainty and predictability. This balancing act leads to improved profitability and a competitive edge. Businesses that do not hedge their commodity price volatility have a lot to learn in gaining better control over how much they pay for these commodities.

Thankfully, these businesses can easily enjoy the services of experts that will help them navigate through unpredictable markets. They will see stable profits even when the markets are turbulent, which is the end goal of all businesses. Experts such as Flow&Ebb help organizations to effectively use the right financial tools and techniques to weather changes in commodity markets.

Through commodity price risk management (CPRM) organizations developa deep understanding of how much price risk they face and what options they have to mitigate the risks. The conversations between finance, treasury and procurement change and decision making improves.

Key to success is to have the right guardrails in place. Put simply, what’s needed is a platform to monitor, track, and report all hedging and trading activity in real time. Flow&Ebb has a platform – but there are others, ranging from muddling along with Excel through to the costly trading systems used by the commodity houses.

Such control means that even when prices are high, the businessshould enjoy relatively lower prices. Executives will know how to effectively carry out raw materials hedging and in doing so will, over time, achieve prices that are 20% or more lower than the competition.

About Flow&Ebb

Flow&Ebb is a specialist in commodity price risk management. There are two sides to the business:

• CONSULTING: At one end, we help clients with no experience in managing commodity price risk set up best practices, and at the other end, we help clients with established functions fine tune their operations.
• TECHNOLOGY: Our cloud based platform, AMORisk.com, helps clients solve the problem of how to run their risk management processes within a cost effective, secure and dependable environment

For more information, visit flowandebb.com or e-mail [email protected]

Contact Us:

Company Name: Flow&Ebb Ltd
Corporate Address: 18 Swan Court, 9 Tanner Street, London
Phone: +44 (0)20 3137 8838
Zip Code : SE1 3LE
Email: [email protected]
Website: www.flowandebb.com
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Contact Email [email protected]
Issued By Flow&ebb
Website Commodity Price Hedging
Phone +44 (0)20 3137 8838
Business Address 18 Swan Court, 9 Tanner Street, London
Country United Kingdom
Categories Business
Tags commodity hedging strategies , commodity market risk
Last Updated December 8, 2017