Commodity Price Volatility and Risk Management Strategies: Impact on Bakery Profitability

• Author(s): Ukpabi Esther Chiamaka
• Paper ID: 1710673
• Page: 1996-1997
• Published Date: 13-10-2025
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 9 Issue 3 September-2025

Abstract

Commodity price volatility has emerged as one of the most pressing challenges confronting the bakery industry. Given the dependence of bakeries on key agricultural commodities such as wheat, sugar, dairy, cocoa, and energy inputs, fluctuations in global and domestic markets directly affect cost structures and profitability. This paper examines the drivers of commodity price volatility, assesses its impact on bakery profitability, and explores financial, operational, and strategic approaches to risk management. Case evidence from Nigeria demonstrates how bakeries can adopt hedging, diversification, and cost-efficiency measures to mitigate risks. The findings suggest that proactive strategies can enhance resilience and support long-term profitability in the face of volatile markets.

Keywords

Commodity price volatility; Risk management; Bakeries; Profitability; Hedging; Nigeria; Food economics JEL Classification Q13 – Agricultural Markets and Marketing; Supply; Prices L66 – Food; Beverages; Cosmetics; Tobacco; Wine and Spirits G32 – Financing Policy; Financial Risk and Risk Management D24 – Production; Cost; Capital; Total Factor, and Multifactor Productivity; Capacity

Citations

IRE Journals:
Ukpabi Esther Chiamaka "Commodity Price Volatility and Risk Management Strategies: Impact on Bakery Profitability" Iconic Research And Engineering Journals Volume 9 Issue 3 2025 Page 1996-1997

IEEE:
Ukpabi Esther Chiamaka "Commodity Price Volatility and Risk Management Strategies: Impact on Bakery Profitability" Iconic Research And Engineering Journals, 9(3)