Risk Management in Commodities

Risk management in commodities involves identifying, analyzing, and mitigating potential financial losses from fluctuations in commodity prices, supply disruptions, or geopolitical events. Traders and companies use strategies like futures contracts, options, and hedging to lock in prices or protect against adverse market movements. This helps stabilize revenues, control costs, and ensure business stability despite unpredictable market changes. Effective risk management enables stakeholders to make informed decisions, reduce uncertainty, and sustain profitability in the volatile commodities market.