A commodity manager is in charge of overseeing the purchase, use, and sale of a specific commodity. Commodity managers are employed governments, businesses, and investment firms, and they often oversee a team of traders. Commodity managers are frequently salaried employees, but private-sector managers are frequently paid on commissions.
Commodities such as oil, gas, and various types of food must be acquired government agencies such as the military and federal food programs, as well as organizations such as utility providers. If these commodities are in short supply, these agencies will be unable to function effectively. The commodity manager must ensure that the commodity’s supply is sufficient to meet demand. A commodity manager must negotiate with domestic and international supply firms and arrange purchase contracts on behalf of the government agency that needs the commodity. In some cases, government agencies will have surplus supplies, and the commodity manager will need to make arrangements to sell them.
Major corporations’ commodity managers must broker deals to purchase the raw materials needed to manufacture goods. Furthermore, these individuals purchase commodities that are required for a company to provide service to its customers. Commodity managers working for trucking companies may arrange contracts to purchase gasoline at wholesale prices, while commodity managers working for construction companies may broker deals to purchase large quantities of lumber or other building materials.
Commodity managers work for investment firms to buy and sell precious metals like gold and silver, as well as other marketable commodities like oil and gas. While most commodity managers in corporations and governments are tasked with purchasing goods for their own use, commodity managers in investment firms are tasked with purchasing and selling commodities for profit. Successful commodities managers working for investment firms are able to purchase large quantities of commodities at low prices and then resell them to other investors for a much higher price. Commissions are paid to investment managers based on sales revenue.
A commodity manager must have a thorough understanding of the entire commodities market, as well as the ability to anticipate and prepare for supply shortages and price increases. If economic and industry data indicate that supply will soon fall, a commodity manager may choose to buy and hold excess supplies when supplies are plentiful. Commodity managers are also in charge of keeping track of supplies and locating suitable storage facilities. This usually entails making storage arrangements with warehouses or companies that specialize in storing volatile commodities like crude oil or natural gas.