what-are-commodities-start-here-raw-materials-market-souk

What are Commodities? – Start Here

A commodity is “a raw material or primary product that can be bought and sold, such as copper or coffee” according to the Oxford English dictionary. Just remember this; it is a raw material.

Wikipedia has a more elaborated definition; “a class of goods for which there is demand, but which is supplied without quantitative differentiation across the market. A commodity has full or partial fungibility; that is, the market treats its instances as equivalent or nearly so with no regard to who produced them”.

Here, the takeaway is that commodities can be replaced easily for another piece of the same material. One Kg of wheat can easily be replaced with another Kg of wheat.

Commodities are generally classified in families: Energy, Metals & Minerals, Chemicals, and Agricultural commodities.

Takeaways

In summary, commodities are raw materials that can easily be replaced with an identical or almost identical substitute of the same kind. Think of wheat, rice, crude oil, or iron ore.

They are generally produced and sourced as industrial products in bulk, and are progressively transformed into finished products.

Commodities are present all around us, from our cup of tea and chocolate bar to the chip components of your phone and laptops.

Leave a Reply

Your email address will not be published.

Related Posts
hydrogen-fuel-cell-toyota-vehicle-megaweb-toyota-city-tokyo
Read More

What Is Hydrogen Fuel?

Hydrogen fuel is a promising technology that contributes towards a low-carbon energy mix. Hydrogen fuel can be a…
trading-start-here-burj-khalifa-dubai-united-arab-emirates
Read More

Trading – Start Here

Raw materials are bought and sold at all times around the world – from common consumer sales at the corner…
brazils-top-commodities-rio-de-janeiro
Read More

Brazil’s Top Commodities Exports

What are Brazil’s top commodities? Brazil is everywhere in the news right now. What makes Brazil a commodity trading medallist?…