Risk Management

A Portfolio Approach to Commodity Price Risk Management

Successful procurement price risk management means striking a balance between supply assurance, cost reduction, and volatility. Like diversification strategies used by businesses and investment companies to manage risk, commodity buyers may implement a portfolio approach to managing price risk by using diversified strategies including fundamental and technical analysis, structured products, timed purchases, and systematic models.

Our risk management team leverages multiple tools, disciplines, and proprietary systems to help you achieve your procurement goals.

Supply Assurance

  • Diversifying Suppliers
  • Commodity/Ingredient Alternatives
  • Negotiating Toll and Flat Price Arrangements
  • Timed or Structured Purchases
  • Hedging

Cost Reduction & Volatility

  • Fundamental Analysis of Long-term Drivers
  • Technical Analysis of Trends and Seasonal Factors
  • Managed Money Drivers
  • Structured Product Timing and Analysis
  • Systematic Models

Risk Management Tools

  • Volatility-based Price Projections
  • Structured Product Analysis
  • Statistical Correlation Analysis of Price
  • Stocks-to-Use Ratios
  • Other Supply and Demand Factors

Consulting Touchpoints

  • IQ Intelligence Platform
  • Commercial Intelligence Briefings
  • Daily Technical Outlooks
  • Risk/Opportunity Assessment Meetings
  • Model Signal Generation