Can you use your enterprise resource planning (ERP) software for commodity trading and risk management (CTRM)? ERP vendors will say yes and claim that the appeal of using familiar technology is strong. But ERP systems were simply not designed to handle the complex, fast-moving nature of commodity markets – so proceed with caution.
The ERP Mistake Commodity Firms Can’t Afford
Why shouldn’t you choose a standard ERP system to manage commodity trading? The answer is simple: ERP systems are not built to handle the volatility and variability of commodity markets.
An ERP system is great if your business purchases or procures raw materials at a fixed price, in a fixed place, at a fixed time. ERP systems work very well with contractual certainty and provide tremendous value in the standard manufacturing business model, where the price of goods is known throughout the supply chain.
Commodity trading is fundamentally different. The way that commodities are bought, sold, shipped, stored, invoiced, accounted for, and valued throughout the supply chain falls outside standard ERP capabilities
In short, ERP systems are just not designed to efficiently and effectively meet the unique and complex needs of the commodity trading value chain.
ERP vs. CTRM: Choosing the Right Tool for the Job
CTRM software is designed specifically for the complexities of commodity trading and risk management. Commodity traders, processors and purchasers use CTRM software to manage physical trades, pricing, accounting, derivative trades, positions, mark-to-market, origination, logistics, risk management, procurement, planning and scheduling.
CTRM can be used for all asset classes, including agriculture (coffee, cocoa, grains, oilseeds, sugar, rubber, palm, etc.), energy (crude and refined products, natural gas, natural gas liquids, liquefied natural gas, power, coal, renewables), and metals (base metals, refined, steel, scraps, and concentrates).
Commodity firms need more than a one-size-fits-all CTRM.
Quoreka’s CTRM platform delivers over 60 specialised, cloud-based apps that tackle the most complex challenges in trading, risk, supply chain, and procurement. From P&L attribution and risk monitoring to inventory and position management, each app connects seamlessly across the commodity value chain.
This modular, app-based approach lets firms start with what they need, scale as they grow, and go live in weeks—not months. With real-time market data, mobile access, and workflow integration, Quoreka helps firms turn market volatility into actionable insight, ensuring faster, smarter decisions.
ERP for Commodities: Where the Promise Breaks Down
At first glance, using an ERP system for commodity management may seem like a simple choice. But the reality is very different. ERP platforms weren’t built for the complexities of commodity trading, and trying to retrofit them with missing functionality quickly becomes costly, time-consuming and ineffective. The result is often a patchwork system that still can’t keep up.
Commodity trading demands a platform purpose-built for it—a CTRM. With a CTRM, you get the tools to manage risk, track positions, and respond to market volatility in real time. Relying on ERP for trading is like trying to run financial models in Word when Excel was designed for the job. The right tool makes all the difference.
Want to learn how Quoreka’s platform approach to CTRM surpasses ERP to help your firm seamlessly manage trade lifecycle, market volatility, logistics and regulatory demands? Schedule a demo today and download our whitepaper to learn more about why choosing the right system is no longer optional for your firm – it’s a strategic imperative.