Insights (Sponsored by StoneX) - 2

chains is just one aspect of potential cracks in the
feedstock link. In a market squeezed by pandemic-related
stressors and other concurrent concerns
like potential inflation, market participants may
encounter a shortage of working capital. Protecting
prices is as much of a priority as getting necessary
Volatility in supply and cost, especially in today's
operating environment, may defer procurement
of feedstock that a purchaser needs for their business.
Flexibility, then, becomes another priority in
a growing list of wants and needs.
As in any interlinked system, weaknesses in one
area can affect others. To shore up their feedstock
supply and stabilize the broader chain comprised
of many entities, processors can look at more ways
to get the raw material they need, whether it's corn
for ethanol, flour for food or oil for gasoline. With
the stakes high in a tight and competitive market,
market participants need to examine all tools
available to them.
Having more options and reliable business
partners is particularly important for small and
midsized enterprises. These kinds of organizations
don't have access to the tools, technologies and
networks that larger corporations do, as they work
to manage materials and costs.
A look at recent headlines underscores the importance
of having a strong risk management plan
and partner. Rapid price spikes, reduced aggregate
inventories and shortages, possibility of the
commencement of a new commodity super cycle,
logistical log jams, etc. The " What now? " question
should be asked beforehand, not after a situation
has unfolded.
An Enhanced Approach to
Procurement and Pricing
Uncertainties in procurement and pricing have
a ripple effect across organizations. Executives
at a cereal company, for example, might have to
answer to shareholders about such issues as fluctuations
in the cost of oats. At another level within
the same cereal company, the finance team may
be contending with ups and downs in cash flow
and earnings that impact when, how, and from
whom they buy raw materials for processing and
production. Over in research and development,
supply and pricing influence what products might
be coming down the pipe. And in the general mar

Insights (Sponsored by StoneX)

Table of Contents for the Digital Edition of Insights (Sponsored by StoneX)

Insights (Sponsored by StoneX) - 1
Insights (Sponsored by StoneX) - 2
Insights (Sponsored by StoneX) - 3
Insights (Sponsored by StoneX) - 4
Insights (Sponsored by StoneX) - 5
Insights (Sponsored by StoneX) - 6
Insights (Sponsored by StoneX) - 7