In early 2011, while leading the global palm oil business at Pacific Interlink, I began noticing signals that went beyond normal market volatility. Prices were declining, and at first it looked cyclical. But experience told me this was something deeper: a systemic risk building beneath the surface.
When volatility became enterprise risk
Over the following months, prices collapsed from around $1,250 per metric ton to near $700—a correction of roughly 40%.
At that point, this stopped being a trading problem. It became an enterprise-wide risk management challenge, touching every part of the organization:
- Customer credit
- Trading exposure
- Payment security
- Operational execution
- Commercial decision-making
I formed a cross-functional crisis team to confront all of these dimensions at once.
A coordinated response across the business
We reassessed every customer relationship based on financial strength and contractual commitment. Trading positions were reviewed continuously. Letters of credit and shipping documentation came under tighter scrutiny to protect cash flow.
Operationally, we tightened control over shipment execution and vessel selection, knowing that even a small operational lapse can trigger a contractual dispute when a market is under this much stress.
Losses in a 40% correction are never fully avoidable. But the coordinated response significantly reduced our exposure and protected the firm's position through the worst of the collapse.
Resilience is organizational
The lesson I carry from that period, and bring into my work at MS Horizon Partners today, is this: strategic risk management is never the job of one department.
Resilience is organizational. Commercial, financial, operational, and executive functions have to move as one system.
That is what separates true management from mere reaction.