Commodity risk

<h2 id="groups-at-risk">Groups at risk</h2>
<p>There are broadly four categories of agents who face the commodities risk:
</p>
<ul><li><a href="/facts/Production_(economics)/G5mF3WkI">production</a> (farmers, plantation companies, and mining companies) face price risk, cost risk (on the prices of their inputs) and quantity risk</li>
<li><a href="/facts/Buyer/y35C00fn">Buyers</a> (cooperatives, commercial traders and trait ants) face price risk between the time of up-country purchase buying and sale, typically at the port, to an exporter.</li>
<li><a href="/facts/Exporter/t8wVcoNL">Exporters</a> face the same risk between purchase at the port and sale in the destination market; and may also face political risks with regard to export licenses or foreign exchange conversion.</li>
<li><a href="/facts/Governments/N4bYL0VC">Governments</a> face price and quantity risk with regard to tax revenues, particularly where tax rates rise as commodity prices rise (generally the case with metals and energy exports) or if support or other payments depend on the level of commodity prices.</li></ul>
<h2 id="see-also">See also</h2>
<ul><li><a href="/facts/Fuel_price_risk_management/YzbsUjJN">Fuel price risk management</a></li>
<li><a href="/facts/Sprott_Molybdenum_Participation_Corporation/FFM3x6U9">Sprott Molybdenum Participation Corporation</a></li>
<li><a href="/facts/Uranium_Participation_Corporation/bkdW1HqQ">Uranium Participation Corporation</a></li></ul>

<h2 id="external-links">External links</h2>
<ul><li><a href="https://web.archive.org/web/20130812135118/http://www.chicagofed.org/webpages/publications/understanding_derivatives/index.cfm">Understanding Derivatives: Markets and Infrastructure</a> Federal Reserve Bank of Chicago, Financial Markets Group</li>
<li><a href="http://help.sap.com/saphelp_globext607_10/helpdata/en/55/3f86506a8a475f8a47678fd7a68bb6/frameset.htm">SAP Library - Financial Risk Management of Commodities</a></li></ul>

<h2 id="references">References</h2>

<ol>
<li id="fn:1"><p>International Monetary Fund (2005). Financial Sector Assessment. ISBN 0821364324. <a href="0821364324" target="_blank">0821364324</a> <a href="#fnref:1" class="footnote-back-ref">↩</a></p></li>
</ol>

Commodity risk open-in-new

Commodity risk