How can commodity market intelligence reduce the Cost Of Goods Sold (COGS)?

Posted by Mintec Team on Feb 12, 2023 9:39:46 AM

What is Commodity Market Intelligence?

Commodity market intelligence is a type of market and price analysis that focuses on providing insights and information about the prices, trends, and dynamics of commodities and raw materials used in various industries. It includes data and analysis on factors such as demand, supply, geopolitical events, economic indicators, and regulatory changes that can impact commodity prices and market conditions.

Commodity market intelligence can be used by a variety of stakeholders, often involved in the buying process such as procurement teams, including producers, traders, investors, and consumers to make informed decisions about their exposure to the commodity markets. The insight enbles them to make more informed business decisions such as buyers negotiating  supplier prices. For example, producers may use commodity market intelligence to track the prices of raw materials they use to produce their goods, while traders may use it to identify market trends and price movements to make informed buying and selling decisions.

The information can be gathered from a variety of sources including government agencies, market research firms, financial institutions, and trade associations. It can be presented in various forms including reports, data feeds, and market analyses. By using commodity market intelligence, stakeholders can better understand the market conditions and make data-driven decisions that can impact their bottom line.

How can Commodity Market Intelligence be used to reduce costs?

Commodity market intelligence can help you reduce your Cost of Goods Sold (COGS) by providing you with valuable insights into the market conditions and trends that influence the prices of the raw materials and goods you use in your business. Here are some ways you can use commodity market intelligence to reduce your COGS:

  1. Market monitoring: Keep track of the prices of the commodities you use in your business and the factors that are driving their prices, such as demand, supply, and geopolitical developments.

  2. Supply chain optimization: Use commodity market intelligence to identify potential cost savings in your supply chain by negotiating better prices with suppliers, reducing waste, and improving logistics.

  3. Hedging strategies: If you are exposed to commodity price volatility, you can use commodity market intelligence and price forecasts to develop hedging strategies that help you manage the risk of price changes and reduce the impact on your COGS.

  4. Sourcing alternatives: Commodity market intelligence can help you identify alternative sources of raw materials and goods that can reduce your COGS.

  5. Market analysis: Analyze the historical price trends of the commodities you use in your business to predict future price changes and develop strategies to minimize the impact on your COGS.

By leveraging commodity market intelligence, you can gain a competitive edge and reduce your COGS, which can help increase your profitability and competitiveness in the marketplace.

Mintec Analytics provides extensive commodity market intelligence and price insight to enable businesses to control their costs better, reduce exposure to price risk and drive efficencies across their buying teams.

Topics: Procurement