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| Thursday, 28 August 2008 01:45 am EST |
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Commodities Management Changes in commodities prices can have significant effects on producers’ and consumers’ revenues and credit exposures. CPM Group structures price hedging and materials management programs for clients. We advise our clients on ways to manage their price and overall exposure to commodities, whether these are their products or raw materials used in their manufacturing processes.  CPM is known for the use of efficient strategies that not only protect clients from adverse price moves but also allow clients to benefit from price movements in the commodities they produce or use. Our expertise in this area has led us to work with major corporations, international organizations, and sovereign governments around the world. However, we will still focus on the needs of the smallest company that can be adversely affected by commodities price changes. Across the markets, from precious metals to natural gas to cotton and cocoa, CPM Group custom tailors solutions to help our clients avoid the dangers of fast and unexpected movements in prices. CPM works in any market around the world and with nearly any commodity, no matter how specialized. Physical Management CPM Group manages the purchase and sale of physical commodities for clients, as well as inventory management and refining programs. We act with confidence and confidentiality for our clients who need various commodities for their manufacturing activities. Specialty Metals CPM has managed the acquisition and disposal of some of the largest stocks of specialty metals for clients without moving markets and achieving prices significantly above our client’s budgeted expectations. Engaged CPM Group has conducted numerous seminars on hedging and commodity price risk management programs and issues. One such seminar was for the Energy, Petroleum, and Mining Division of the International Finance Corporation. CPM Group analysts have written extensively about hedging, both in company publications and in major financial market publications around the world. In addition, employees of the company have presented at major international conferences. The presentations link on this page contains PowerPoint slide presentations that provide detailed information on hedging strategies and tactics. Compound Options Strategy CPM Group prefers to use a compound options strategy that provides superior price protection with reduced credit risks. It provides producers a guaranteed minimum price while allowing them to receive higher prices if prices rise. Conversely, it provides commodities consumers with a ceiling on the prices they will pay under any circumstances, while allowing them to pay lower prices if prices decline. It is a zero-premium option strategy, which, if executed in the dealer market, is without up-front fees, commissions, or premia. It also provides for sharply reduced and pre-determined maximum credit risks. CPM Group has used this strategy in programs in conjunction with the World Bank, the International Coffee Organization, the International Cocoa Organization, the U.S. AID, and others. It is a strategy that has been used effectively by commodity producers and users for many years and is deemed to be one of the most effective and efficient means of hedging commodity price risk in existence today. |
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