7 September 2023, London: 13,000 trading professionals responded to the 2023 Commodity Trading Annual Survey conducted by Commodities People over the last year in a series of surveys and polls, making it the most comprehensive and insightful report on commodity markets to date. The individuals surveyed came from all areas of commodities trading – from grain to oil, gas and shipping, to metals; those responding represented firms from across the whole market: producers, technology providers, manufacturers, etc.
Ben Hillary, Founder & Managing Direction of Commodities People, comments: “I’m particularly satisfied that while the majority of respondents are from key trading locations, all those within the commodities value chain, from source to destination, have had a say, with contributors from all corners of the globe – meaning this survey provides perspectives truly representative of the world of commodities.”
The survey produced some surprising findings, as well as confirming current market concerns. Some of the more surprising findings were that credit and liquidity risks are not a high priority, given the high interest rates, and 34% of those surveyed do not have a real-time market risk system in place. However, risk overall was a major concern, with the word ‘volatile’ featuring time and again. As expected, 50% of participants believe geopolitical instability will be the biggest disruptor in the next five years and 30% believe that climate change will be the main contributor to instability; 39% are currently looking to enhance their risk tools.
Scott Wellcome, Director, Grains Risk Management at GoodMills Group GmbH, speculates that the reason liquidity and credit risk are low on the list might be due to, “… the fact that many participants in the market have never experienced inflation or rising interest rates and are still learning how they affect the market and how to navigate the associated risks.”
52% of respondents believe that AI will be instrumental in performing a part of the risk management function while a surprising 74% say that real-time stress testing is not needed. In terms of drivers for change, 54% gave business efficiency as one of the top reasons, but only 32% attributed this to cost savings, a number which might have been expected to be higher, in light of the challenging market conditions.
Hillary concludes: “For the commodities community the ‘new normal’ is proving to be anything but! And it’s clear that the line between success and failure has never been thinner. Opportunity and risk envelop the commodities landscape like never before.”
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John Norris / Maddie Woodside
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About Commodities People:
Commodities People is the independent centre for energy and commodities, and for more than 10 years has been the provider of popular events, ‘Commodity Trading Week’ and ‘Energy Trading Week’. The events are a vital platform for the energy and commodity market participants to exchange ideas and knowledge, find out about innovations in their market sectors, and learn from market experts.
Commodities People’s experience and understanding of the market attracts pioneering companies and decision-makers to its community, be it online or offline, bringing the entire industry together for shared market expertise, latest insight and innovation.