Mark-to-Market (MtM) is a fundamental accounting and valuation method used in the commodity industry and refers to the process of valuing open positions or assets at their current market prices.
Commodity producers and traders use Mark-to-Market valuation to assess the real-time value of their holdings in line with prevailing market conditions. This practice helps them to accurately to determine their portfolio's financial health, track potential gains or losses, and make timely decisions about risk management, position adjustments, and profit-taking. Mark to Market is crucial for maintaining transparency, ensuring accurate reporting, and enabling informed decision-making in the dynamic and volatile commodities market environment.
