GlossaryEN1 min readUpdated: Jun 23, 2026

Commodity Risk Assessment in the Supply Chain

Procurement managers, logistics coordinators, and supply chain analysts apply commodity risk assessment to systematically identify and evaluate threats to the continuity of raw material flows.

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Last updated: 23 June 2026Published: 19 June 2025

Source: https://www.cips.org/knowledge/procurement-topics-and-skills/risk-management/in-focus/what-is-commodity-risk-management/

Category

Logistics Concept

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1 min

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Definition & Explanation

Procurement managers, logistics coordinators, and supply chain analysts apply commodity risk assessment to systematically identify and evaluate threats to the continuity of raw material flows. Core risk dimensions include price volatility, supply disruptions from geopolitical or environmental events, quality defects at source, and regulatory shifts in producer or import countries. Assessment findings feed directly into mitigation strategies: qualifying alternative suppliers, setting buffer stock levels, using hedging instruments, and taking out supply chain insurance. In raw-material-intensive industries such as chemicals, automotive, and food processing, structured risk assessment is established practice and increasingly required by due diligence legislation.