Whether you are focused on trading spot or future, the contract management of physical commodity trading requires different and more detailed information to be captured than for contracts of regular products. When the exchange traded derivatives details need to be captured,  additional complexity and risk arises linked to contract management that needs to be captured.

The physical contract management of commodities involves entering a contract to buy or sell bulk raw materials at a specified price to be delivered spot or on a future date. A seller is hoping to secure a stable price for goods while a buyer is seeking to either lock in commodities at a certain price level or speculating that the cash or spot price will rise before the settlement date and gain a profit.

The instant availability of data linked to any contract is required to lock the required profit or limit the negative exposure to the volatile nature of commodity trading. Just think of the Inco-terms, quality agreements, units of measure used in the contract, pricing terms, registration of all the data related to the contract for future verification.

Important requirements related to the visibility the contracts, the counter party , the commodity and the shipments are:
•    Payment terms
•    Product specific criteria
•    Quality standards
•    Standard contracts agreements
•    Payable elements
•    Penalty elements
•    Pricing options
•    Inco-terms
•    Credit limits and control
•    Trading limits and approvals
•    Approval structures