INTRODUCTION
Wholesale commodity trading and risk management can encompass any number of business processes and strategies , from brokered trades in which the buyer purchases some quantity of commodity and then immediately resells it at the same point for ( hopefully ) a profit – to multi-commodity transactions involving global supply chains , transformations , and complex financial hedging strategies . Vendor provided software to service this wide-ranging market , commonly known as Commodity Trading and Risk Management or CTRM software , will similarly vary in possible functional coverage , with some CTRM solutions addressing specific functional components ( such as deal capture or risk analysis for a specific commodity ), while others will attempt to model and provide wide-ranging functional coverage for all possible commodity classes and the unique physical operations associated with each and every possible combination in between .
Given this , the Commodity Trading and Risk Management ( CTRM ) software category is very difficult to define except in the broadest of terms . When the term “ CTRM ” was first coined , it was essentially used to expand the breadth of the software category known as Energy Trading and Risk Management ( ETRM ). Both terms broadly mean the same thing , with ETRM reflecting software solutions that address the capture , position management and accounting for any wholesale energy trade ; and CTRM reflecting a wider reach ( including energy in some cases ) and encompassing other commodity categories including ags , softs , and metals .
In the last few years , CTRM has been increasingly regarded as a component of an even larger software category called Commodity Management ( CM ), further muddying the classification of the types of software that address the needs of the wholesale commodity marketplace . Commodity Management solutions are most commonly utilized in the mid- and downstream
© Commodity Technology Advisory LLC , 2017 , All Rights Reserved .
commodity markets , including food processing and packaging companies , agricultural merchants , and manufacturers . Additionally , there are a number of terms used to describe different aspects of Commodity Management such as ‘ ERP for Commodities ’.
An as analyst organization , ComTech must classify the nature and capabilities of the various vendor-supplied products ( and their markets ) in order to help buyers better understand what solutions may be available to satisfy their needs . As the markets for these products continue to expand and mature , and as the software vendors seek additional market share , the interactions and / or overlap in capabilities among the wide range of products servicing the breadth of the wholesale commodity marketplace grows as well , making such classifications more complex . As such , this paper will provide our view of the various definitions that apply to these markets and seek to help both buyers and vendors understand the emerging terminology in use today .