Commodity Trading

We understand the unique challenges faced by commodity traders and offer specialised insurance and trade finance solutions to mitigate risk and improve financial stability.

Commodity trading is a dynamic and essential sector that enables the exchange of primary products such as agricultural goods like grain and coffee and natural resources like oil, gas and metals. This global market is characterised by its high volatility, driven by fluctuating market conditions, geopolitical events and the constantly changing balance of supply and demand. Traders must navigate a complex environment where prices can change rapidly. This requires a keen understanding of market trends and the ability to make quick decisions.

The challenges in the commodities market are complex, especially in the area of insurance. The high volatility and global nature of trading expose participants to significant risks, including credit risks, political risks and operational risks. Securing insurance cover is crucial, but can be challenging due to the unpredictable nature of the market.

Credit insurance, for example, protects traders against the risk of buyer default, but obtaining such coverage requires a detailed assessment of the creditworthiness of trading partners and the economic stability of their regions. In addition, geopolitical risks such as trade sanctions or political instability require comprehensive political risk insurance to protect investments. As commodity traders endeavour to manage these risks, a robust insurance and risk management strategy is critical to ensure financial stability and continued success in this volatile industry.

Credit insurance solutions

Whole turnoever

protects your entire portfolio of trade receivables from non-payment and ensures that your business remains financially stable, even if multiple buyers default.

Top-up

Provides additional protection if the primary insurance limits are not sufficient and ensures comprehensive risk management.

Selected Buyers

Provides targeted coverage for your some of your customers, safeguarding your revenue streams from key trading partners.

Excess of Loss

The insurer covers losses that exceed a set amount, called the retention limit. This protects you from catastrophic losses and ensures financial stability by limiting the risk exposure to a manageable level.

Single Risk

Indispensable for traders heavily dependent on a single customer. This insurance covers the risk of non-payment by this important buyer.

Multi-layer programs

Commodity traders often need a mix of these five solutions, instead of relying on a single one. 

Domains we are active in

Agri commodities

  • Grains and cereals
  • Oilseeds
  • Dairy
  • Coffee
  • Sugar 

Metals

  • Ferrous metals
  • Base metals
  • Precious metals
  • Minor metals

 

Industrial commodities

  • Chemicals
  • Fertilizers
  • Building materials
  • Plastics

 

Energy

  • Fossil fuels
  • Refined products
  • Renewable energy

Tips to know!

95%

Insured percentage

As a commodity trader, you should negotiate an insured percentage of 95% instead of 90%.

This will affect the amount you can finance through a bank.

A+

Credit rating

If you insure your receivables, your bank will base its financial reserves on your insurer’s credit rating and not yours.

This lowers their financing costs and improves your interest rates.

Stacking policies

Individual buyer credit limits in a single whole turnover policyare often not sufficient for a commodity trader.

Consider taking out a mix of whole turnover, selected buyers, top-up and single buyer policies with multiple insurers.

Why choose Raxell?

Raxell stands out in the commodity trading sector with its in-depth industry knowledge, comprehensive insurance solutions and customised trade finance advisory services. We work with you to understand your specific needs and develop strategies that protect your business, improve your financial stability and support sustainable growth in a volatile market.