WHAT IS A COMMODITY?

A commodity is a basic
physical asset, often used
as a raw material in the
production of goods or
services.
 To be traded on the markets,
a commodity must be
interchangeable with another
commodity of the same type
and grade. That means that to
a trader, gold is gold: no
matter where it was mined, or
which company mined it. 
 Types of commodity

 Soft
commodities
 Hard commodities
 Soft commodities

Soft commodities are best

understood as grown
commodities. Coffee, cocoa,
orange juice, sugar, canola, corn,
lumber, wheat, lean hogs, feeder
cattle, cotton, soybeans, barley,
etc.
 Hard commodities
Hard commodities refer to
commodities that are naturally
occurring raw materials. Due to
the nature of the definition, one
can deduce that hard
commodities are mostly mined
or drilled.
The most-traded hard commodities
are:
 Precious metals: Gold, Silver,

Platinum
 Base metals: Copper, Iron Ore,

Aluminum
 Energy: Crude oil, gasoline, natural

gas, Ethanol
What commodities traded most? Philippines
 Rice

 sugar,

 corn,

 palm oil, and

 coconuts

other potential
commodities include:
coffee, rubber,
bamboo, and
mineral products
like coal, copper,
and nickel,
What is the difference between a commodity and
a product?

A commodity is a raw material used to

manufacture finished goods. A
product, on the other hand, is the
finished good sold to consumers. Both
commodities and products are part of
the production and manufacturing
process; the main difference
being where they are in the chain.
 hard and soft commodities may
be somewhat different, the
common factor to both these
commodity markets is supply
and demand.
 Supply and demand are what
will eventually decide the prices
of the commodities in question.
 What is commodity trade and risk
management
The management of risk associated with
commodity trading is called commodity
risk management. They can be traded
two separate markets: the cash (spot)
market and the futures market. ... They
are traded on commodity exchanges
which are platforms that allow
numerous traders to trade commodities.
Before trading stocks, futures
and options, investors should
thoroughly analyze their
investment goals and
uncertainties carefully.
AGRICULTURAL
COMMODITY
 WHAT ARE
AGRICULTURAL
COMMODITY?
• An agricultural commodity includes any
animal or crop grown or raised on
farmland. These commodities vary from
grains to livestock.
• Agricultural commodity means wheat,
rye, flax, barley, grains, sorghum, milk
and its product.
The term 'commodity' is commonly
used in reference to basic agricultural
products that are either in their
original form or have undergone only
primary processing. Examples
include cereals, coffee beans, sugar,
palm oil, eggs, milk, fruits,
vegetables, beef, cotton and rubber.
Agricultural commodities also
include non-food products essential
to industrial and manufacturing
sectors.
EXAMPLES OF ANNUAL CROPS

Sorghum. Green peas

Peppers. Rice
Radishes. Spinach
Thank you