|Overview: Commodity Risk|
|Definition||The potential for losses related to the commodity price fluctuations.|
|Related Concepts||Business RiskCompetitive RiskExchange Rate Risk|
What is Commodity Risk?
John Spacey, updated on July 12, 2017
Commodity risk is the potential for changes in commodity prices to result in losses. Commodity prices tend to be volatile and can change rapidly over the short term. It's also possible for prices to shift higher or lower for long periods of time, a phenomenon known as a commodities super cycle. Many industries take commodities as a basic input and are highly sensitive to changes in prices. The following are a few types of commodity risk.
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