Global Commodity Trading
We humans need so many things in order to survive in this world. This is the main reason why most people opt to venture in businesses which deal with the basic commodities since they are certainly needed, thus, customers is a surefire thing.
When we talk about global community trading, there are some things that we have to learn in order to be remarkably successful in this.
The global community trading basically deals with the raw or daily products being exchanged. Here, what is important is the trading process’ standardization, especially since this trading type also calls for contracts. Global trading is something that happens between two or even more countries. This is because not all countries actually grow or extract all the commodities which is why this system is being utilized.
The History Behind
The vast history as well as the rich experiences has shown that the market of commodities definitely has an impact on a specific country’s financial status. Its history is not really that clear yet it was believed that the country of China has started the trading of commodities has started approximately 6,000 years ago, with rice as the main commodity. It was even said that the primary reason why World War II happened is that Japan wanted to alienate the countries for some commodities such as rubber and crude oil since there has been a shortage of these commodities. Aside from these, a particular commodity’s over growth can also result to price reduction of that certain commodity.
Crude Oil as a Prime Commodity
An energy commodity that is being kept under constant surveillance by the whole world, organizations, corporations and countries alike is none other than crude oil. If the price of crude oil increases, the countries in the West will suffer. On the other hand, if the price surges down, the nations in the Middle East will be burdened since their daily bread practically comes from it.
Factors that Affect Commodities
There are some things that actually have a big say when it comes to the state of these commodities. These include weather devastations such as cyclone and heavy rains and other natural phenomena like volcanic eruptions and earthquakes. These very factors can even make the affected regions suffer from food shortages.
Commodities: The Basic Types
The commodities are also classified into types so that it will be easy to trade, research and make the process of trading even simpler. First classifications are the energies, a sector that is regarded as most active when global commodity trading is concerned. This will include resources that produce energy such as fossil oil, crude oil, heating oil, natural gas, propane, coal and the likes. Next are the metals composed of copper, iron, zinc, silver, aluminum, gold and others. We also have the grains including soybeans, sugar, rice, cotton, cocoa, corn, wheat and other products of agriculture, making it as the largest of the category types. There are also the so-called softs like hot chocolate, coffee, banana, cotton wool, refined sugar as well as orange juice. Softs are basically the non volatile commodities. Meat and financials are also types of commodities being traded globally.