Commodities Risk Management Solutions - Trade Finance Global

Trade Finance Global
    • Themes

      • Trade

        Do you want to know how access to trade finance can increase your cross-border imports and exports? Explore our Trade Finance hub for practical tools.

        Treasury

        Are you a treasury or operations manager looking to mitigate the risks and efficiently manage your business’ cash flow? If so, check out our Treasury Management hub.

        Payments

        Whether you want updates from infrastructure support to cross-border transactions or clearing house operations to processing techniques, you can find all on our Payments hub.

        Letters of Credit

        Ready to to increase your imports / exports to guarantee the payment and delivery of goods? Find out more about LCs here.

        Shipping & Logistics

        Whether you’re transporting goods, or learning about supply chains, warehousing, transportation and packaging, we’ve got you covered.

        Incoterms

        Need to know which International Commerce Term is right for your needs? Explore our curated guides from shipping expert Bob Ronai.

        Sustainability

        Prioritising sustainable supply chains? Building inclusive trade? Working towards the UN’s 2030 SDGs? Read the latest on global sustainable standards vs green-washing here.

        Customs

        Heading into international markets? From the correct documentation to standardisation, here’s what you need to know for a streamlined customs clearance process.

        TradeTech

        TradeTech is rapidly evolving to help reduce some of the biggest challenges when it comes to trade. Keep up with these innovations here.

        View all

    •  

       

    • News & Insights

      • News

        The latest in Trade, Treasury & Payments - stay up to date on all the changes across the globe.

        Magazines

        The issues feature experts across the industry on the latest developments with specific themed and regional editions.

        Articles

        Insights by the industry, for the industry. These include thought leadership pieces, interview write ups and Q&As.

        Guides

        Working closely with industry experts and trade practitioners we provide inclusive educational guides to improve your technical knowledge and expertise in global trade.

        Research & Data

        We undertake qualitative and quantitative research across various verticals in trade, as well as create reports with industry association partners to provide in-depth analysis.

        Trade Finance Talks

        Subscribe to our market-leading updates on trade, treasury & payments. Join the TFG community of 160k+ monthly readers for unrivalled access in your inbox.

    • Media

      • Podcasts

        Welcome to Trade Finance Talks! On our series we hear from global experts in trade, treasury & payments.

        Shorts

        Enjoy our bite-sized video content for insights on-the-go with our short VoxPop & summary series.

        Webinars

        Experience the true nature of the TFG community through panel discussions on the latest developments - engage with questions.

        Videos

        Join us as we interview leaders in international trade, treasury, payments and more! Watch and learn.

    • Events

      • Partner Conferences

        We partner with industry conferences around the world to ensure that you don’t miss out on any event; in person or online, add to your calendar now.

        Women in Trade, Treasury & Payments

        Get involved in our most important campaign of the year, celebrating the achievements of women in our industry and promoting gender equity and equality.

        Awards

        Our excellence awards in trade, treasury, and payments are like no other. You can't sponsor them, and they're independently judged. They are the most sought-after industry accolades.

        Online Events

        Join our virtual webinars and community events. Catch up on-demand, right here on TFG.

    • Editions
    • Finance Products

      • Trade Finance

        Trade finance is a tool that can be used to unlock capital from a company’s existing stock, receivables, or purchase orders. Explore our hub for more.

        Invoice Finance

        A common form of business finance where funds are advanced against unpaid invoices prior to customer payment

        Supply Chain Finance

        Also known as SCF, this is a cash flow solution which helps businesses free up working capital trapped in global supply chains.

        Bills of Lading

        BoL, BL or B/L, is a legal document that provides multiple functions to make shipping more secure.

        Letters of Credit

        A payment instrument where the issuing bank guarantees payment to the seller on behalf of the buyer, provided the seller meets the specified terms and conditions.

        Stock Finance

        The release of working capital from stock, through lenders purchasing stock from a seller on behalf of the buyer.

        Factoring

        This allows a business to grow and unlock cash that is tied up in future income

        Receivables Finance

        A tool that businesses can use to free up working capital which is tied up in unpaid invoices.

        Purchase Order Finance

        This is commonly used for trading businesses that buy and sell; having suppliers and end buyers

        View all

    •  

       

    • Sectors
    • Case Studies

      • Informing today's market

        Financing tomorrow's trade

        Soft Commodities Trader

        Due to increased sales, a soft commodity trader required a receivables purchase facility for one of their large customers - purchased from Africa and sold to the US.

        Metals Trader

        Purchasing commodities from Africa, the US, and Europe and selling to Europe, a metals trader required a receivables finance facility for a book of their receivables/customers.

        Energy Trading Group

        An energy group, selling mainly into Europe, desired a receivables purchase facility to discount names, where they had increased sales and concentration.

        Clothing company

        Rather than waiting 90 days until payment was made, the company wanted to pay suppliers on the day that the title to goods transferred to them, meaning it could expand its range of suppliers and receive supplier discounts.

        View all

        Get Trade Finance

        Informing Today’s Market, Financing tomorrow’s Trade.

    • Get Trade Finance
  • About Us
  • Talk To Us
Australia France Germany Hong Kong India Ireland Japan Netherlands Singapore Spain United Arab Emirates United States United Kingdom
Trade Finance Global
Sign in Subscribe
Trade Finance Global
Australia France Germany Hong Kong India Ireland Japan Netherlands Singapore Spain United Arab Emirates United States United Kingdom

Commodities Risk Management Solutions

Last updated on 28 Jul 2024
24 Jan 2024 . 3 min read
Mark Abrams
Mark heads up the trade finance offering at TFG where his team focuses on bringing in alternative structured finance to international trading companies.

Access trade, receivables and supply chain finance

We assist companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.

Get started

Content

Commodity Trading & Risk Management Solutions

Commodities trading involves inherent risks that traders must navigate to ensure success.

COMMODITY TRADING RISKWHY IS IT RISKY?HOW TO MITIGATE THE RISK?
Market Price fluctuationsBy staying informed about global trends, traders can make data-driven decisions to mitigate the impact of price volatility.
Operational Challenges in logistics, production, and distributionStreamlining operations, implementing robust protocols in logistics, production, and distribution, and developing contingency plans for disruptions are crucial risk mitigation strategies.
Counterparty Potential defaults by trading partnersRigorous due diligence on potential trading partners, clear policies for investments and deposits, and vigilant monitoring of borrowing agreements help shield businesses from the adverse effects of counterparty defaults.
Commodity trade finance Lack of financial solutions for traders or potential unreliabilityProactive risk management in commodity trade finance involves thorough credit checks on trade financiers, ensuring legal recourse, and potentially securing insurance coverage for payment risks.
Currency Influenced by global transactionsAnalysing FX risk exposure, adopting strategies to minimise currency losses, and balancing risk and reward through adaptive pricing strategies empower traders to navigate the complexities of global markets effectively.
GeopoliticalPotential disruptions due to political events or conflictsMonitoring politics, understanding regional tensions, and adapting strategies mitigate geopolitical risks. Establish contingency plans, diversify sourcing, securing political risk insurance and stay informed to manage these risks effectively in commodity trading.

Traders face the task of managing these risks effectively through various strategies, paramount to a businesses’ survival and success.

This is where Commodity Trading Risk Management (CTRM) solutions come in.

Traders face the task of managing these risks effectively through various strategies, paramount to a businesses’ survival and success.

This is where Commodity Trading Risk Management (CTRM) solutions come in.

1. What is CTRM?

CTRM stands for Commodity Trade and Risk Management. The are solutions using specialised software system designed for commodity trading. It helps traders manage the entire lifecycle of trades, from deal capture and contract management to risk management, logistics, and settlement. CTRM solutions are designed to handle the complexities of commodity trading, including price volatility, logistical challenges, and regulatory requirements.

2. How does a CTRM solution support commodity trading?

CTRM solutions support commodity trading in several ways. They provide real-time data and analytics to help traders make informed decisions, manage risks, and optimise their trading strategies. They also automate many of the complex processes involved in commodity trading, such as contract management, logistics, and regulatory compliance. This helps to increase efficiency, reduce errors, and lower operational costs.

3. What are the key features of a CTRM solution?

Key features of a CTRM solution include deal capture and contract management, risk management, logistics and inventory management, financial and regulatory reporting, and analytics. These features are designed to provide a comprehensive view of trading operations, enabling traders to manage their positions, mitigate risks, and maximise profitability.

4. How can a CTRM solution help manage risks in commodity trading?

A CTRM solution helps manage risks in commodity trading by providing real-time visibility into market positions, price exposures, and potential losses. It uses advanced analytics to identify and quantify risks, and provides tools for hedging and other risk mitigation strategies. It also helps traders comply with regulatory requirements, reducing the risk of non-compliance.

5. What are the benefits of using a CTRM solution?

Using a CTRM solution can provide several benefits. It can help traders make more informed decisions, manage risks more effectively, and optimise their trading strategies. It can also increase operational efficiency, reduce errors, and lower costs. Moreover, it can improve compliance with regulatory requirements, reducing the risk of penalties and reputational damage.

6. How does a CTRM solution compare to general project management software?

While general project management software can be used to manage a wide range of projects and tasks, a CTRM solution is specifically designed for commodity trading. It has specialised features for deal capture, contract management, risk management, logistics, and regulatory compliance, which are not typically found in general project management software. Therefore, a CTRM solution can provide more comprehensive and effective support for commodity trading operations.

Speak to our trade finance team



Back to Top