Commodity data integrator and harmonizer RadarRadar publishes first industry outlook

Feb 16, 2023 - Rotterdam, The Netherlands

Advanced Commodity data Analytics 6
Commodity producers, traders, and processors seek to improve risk mitigation frameworks and boost performance in an increasingly volatile market.

Rotterdam, February 16, 2023 – Commodity data integrator and harmonizer RadarRadar publishes its first industry outlook for 2023. The prognosis identifies how commodity producers, traders, and processors are investing heavily in measures to manage the risks that plague commodities markets. Over the past year, RadarRadar has observed a strong demand among commodity industry players for up-to-date, integrated, and reliable data platforms as well as cutting-edge risk analytics tools. Market players are increasingly convinced that their software systems lack the insights that can protect them against unprecedented market volatility and changing conditions.

According to RadarRadar’s observations among clients and other commodity-producing, trading, and processing stakeholders, several factors explain why these companies invest heavily in risk mitigation measures. For one, the industry expects a prolonged scarcity of skilled IT people, resulting in delays and shortages of crucial digitalization processes. In-house and custom-built software solutions, or a single-system-for-all strategy, are long-term solutions to fixing this problem, however they cannot be implemented overnight. In addition, building, maintaining and keeping these solutions up to the latest industry needs and standards is complex and expensive. Furthermore, AI & Machine Learning technologies have evolved and are ready for use, but these require high-quality data, which is often a challenge.

The market expectation for 2023 is unfavourable as there are significant changes in market structure and participants: geopolitical issues, commodity industry consolidation, and integration are leading to less transparency and increased market protection. Analysts believe (See example: a recent Goldman Sachs outlook) that high price volatility will persist in the foreseeable future and may not be at its peak yet even as market liquidity declines. Additionally, there is an increased participation of non-physical commodity players. They are well-funded, take a broader market view often non- industry related, and take speculative positions. Non-physical commodity players deepen the divide between various physical products and related financial markets, increasing risks in hedging activities. This heightens the need for on-demand and reliable insights into combined physical and financial exposure.

Industry challenges

With market insecurity and regulatory reporting requirements ever-increasing, companies seek innovative tools, knowledge, and expertise to harmonize qualitative data from multiple sources to improve existing risk management practices. The reason is that commonly used software often does not meet commodity companies’ current needs. E-/CTRM systems focus on the operational aspects of purchases and sales. For advanced risk management, additional insights and data processing capabilities are needed. ERP suppliers have extensive practical experience, but their systems are not designed to meet the specific and complex requirements of the commodity industry.

Large companies invest in ‘data lakes’ as the benefits of centralized data are evident. However, data lakes come with their own challenges. Data lakes have difficulties associated with cleaning, standardizing, and validating data, which makes it challenging to assess the quality and reliability of the data used for risk management. Furthermore, due to the integration of large volumes of data, a data lake may have different structures, formats, and levels of quality, making it challenging to integrate and analyse the data effectively to make informed decisions.

Ito van Lanschot, managing director of RadarRadar

“A highly volatile market is the result of our increasingly complex and fast-moving world. Until recently, our clients sought to understand evolving market conditions by gathering as much data from various sources as possible. Today, we see that making that data useful is crucial in coping with the fast-changing market dynamics. In response to the industry’s challenges, we improved our technology and renamed Tradesparent to RadarRadar to help commodity companies navigate, as transforming data into trusted, and on- demand information can help turn these challenges into opportunities.”

About RadarRadar

RadarRadar (formerly Tradesparent) is an expert in the commodity trade, production and processing industry, operating in the world’s most fundamental industries: food, energy, and other commodities. Since 2010, we’ve delivered high profile projects for the world’s leading commodity producers, traders, and processors. We work with clients to configure bespoke and extendable data solutions, enabling their successful digital transformation.

In today’s fast-paced information age, and with insecurities about climate change, political developments, and increasingly volatile markets, it is more and more challenging to access the right knowledge in- and outside of the company. This leads to daily financial and operational risks that affect the ability to make informed decisions.

RadarRadar provides your business with the knowledge it needs to succeed. As a technology company, we continuously aim to support our clients with solid data management and advanced risk tools. Our mission is to enable companies to unlock the full potential of their data to improve risk and margin management and boost performance.

RadarRadar. World leader in real-time food & energy knowledge.

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