Stockpiles can buffer industrial price shocks

A country without storage cannot easily use low prices to build reserves for later shortages. It also lacks material to cushion a sudden rise in prices. That exposure affects the prices charged by manufacturers and suppliers before a shortage occurs. Businesses unable to smooth input costs or guarantee supply can include an allowance for disruption in their selling prices. Holding stocks can therefore reduce the uncertainty passed on to customers as well as provide material during an emergency.