Commodities

by iMinds

Learn about Commodities with iMinds Money's insightful fast knowledge series.

A commodity is a tradeable item, which can usually be processed further and sold. This includes industrial goods such as metals; agricultural goods like wheat, wool or sugar; and bulk goods such as iron ore or coal. In their original and simplified sense commodities are uniform in value, meaning it is irrelevant who produces the commodity, as its value will remain the same. For example oil mined by Shell or BP will be worth the same even though it was produced by different companies. Commodities account for the bulk of exports for many nations throughout the world. They are most commonly substances which come from the earth. Hard commodities are extracted from the earth via mining, while soft commodities are grown in the earth. The price of commodities is generally universal and their value remains consistent irrespective of who produces them.

During the 2000s there was a commodities boom as the demand for raw materials grew throughout the world. Developing nations, especially China and India, led this rise in demand. This pushed up the prices for commodities, such as iron ore. During this period many commodities reached an all-time high in terms of cost. Commodity prices have always risen and fallen due to changing conditions, with regards to supply and demand.

iMinds will hone your financial knowledge with its insightful series looking at topics related to Money, Investment and Finance.. whether an amateur or specialist in the field, iMinds targeted fast knowledge series will whet your mental appetite and broaden your mind.
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4 pages, Kindle Edition

First published October 25, 2010

Reviews

[Dr. Appu Sasidharan (Dasfill) · Rating 3 out of 5]

The word commodity is one of those few words you might have heard the most during the pandemic. A commodity can be defined in simple terms as a tradable item that can be processed further and sold. Examples of commodities are agricultural goods like rice, wheat, corn, etc., and industrial goods like metals.



The COVID-19 literally rattled the commodity market. It brought the decline in both demand and supply of commodities globally. When the whole world went into a lockdown, demand for most of the daily necessities plummeted. Oil prices went down due to the restriction of movement of people. Many working in these sectors struggled severely due to a lack of demand for their products. Both exports and imports almost came to a standstill. The enhanced border checking, strict disinfection, and quarantine measures made it extremely expensive to ship commodities.

“Commodities account for the bulk of exports for many nations throughout the world. They are most commonly substances which come from the earth. Hard commodities are extracted from the earth via mining, while soft commodities are grown in the earth. ”

This book was written before the pandemic. Still, it shows the vital role commodities play in our daily lives. Proper classification of commodities is done perfectly in it to make us understand each one better.

[Ta · Rating 2 out of 5]

2 stars