√ Definition of Trade Commodities, Characteristics, Types, Fuel, Industry
Understanding Trade Commodities, Characteristics, Types, Fuel, Industry - On this occasion Regarding Knowledge will discuss the meaning of trade commodities, characteristics, types of fuel and industry.
Understanding Trade Commodities, Characteristics, Types, Fuel, Industry
Let's discuss commodities in full, starting from their meaning first.
Understanding Commodities
A commodity is something or a real object that tends to be easy to buy and sell, can be felt physically and can be stored for a long time a certain time and can be exchanged for other products of the same type which can generally be bought or sold via the futures exchange by investors. A commodity is a product that is traded, including financial instruments, foreign exchange and indices.
Commodity Characteristics
Commodities have characteristics, one of which is that prices are determined by supply and demand, not from sellers or dealers. Price determination is based on each price calculation offender commodities, for example not limited to agricultural products and minerals (oil, sugar, rice, ethanol, aluminum, coffee, wheat, gold, diamonds, silver). There is also a product called
commoditized or which are no longer available according to brand, for example computers.The term commodity became known in the 15th century in England. This term has its origin in the words "commodity” from French which means something pleasant both in service and quality. In Latin, the term "commodity” refers to the various methods used to measure something precisely; appropriate conditions or circumstances of time, good quality; the ability to produce property or something; as well as profits or added value.
The term commodity is referred to as die Ware in German which means products or goods offered for sale. Then, it is called with basic product examples of which are industrial raw materials, energy and goods.
Then, commodities in Indonesia are exemplified by commercial objects, merchandise that can be differentiated according to quality based on international trade standards (wheat, coffee, rubber, etc.) and materials standard.
Interstate Commodity Trade
Trading commodities between countries has its own risks such as promises that may fail due to price fluctuations. Price determination is also determined by supply and demand conditions in the commodity market. Demand can be determined from population growth, new uses for subsidies and increased use.
Offers may change due to increases in production capacity (such as construction of a new factory or total plant area), conditions good or bad weather, seasons, intensive or government restrictions as well as country conditions (such as conflict, natural disasters, circumstances conducive). Many factors cannot be predicted.
This triggers the need to protect value. This need for value can be met by making contracts both on and off the exchange. Initially, the need to protect value only existed in the buying and selling of livestock commodities.
But the need to protect this value is deemed necessary for other commodities, weather, banking, economics and finance. Contracts that are traded on an exchange are called commodities exchange or contract exchange.
Some examples of trading commodities on contract exchanges in countries include:
- London Commodity Exchange, currently called Euronext LIFFE
- New York Board of Trade (NYBoT)
- London Metal Exchange
- Chicago Board of Trade, now merged with CME
- Winnipeg Commodity Exchange
- Jakarta Futures Exchange (Jakarta Futures Exchange/ JFX)
- Multi Commodity Exchabge of India
- Chicago Mercantile Exchange (CME)
- Indonesian Commodity and Derivatives Exchange (BKDI) or Indonesian Commodity and Detivatives Exchange (ICDX)
Types of Commodities that Create a Contract Basis for Trading on Various World Exchanges
1. Food Trading Commodities
| Commodity | Unit | Currency | Exchange Name |
| Arabica Coffee | 1 ld | USD | NYBoT |
| Robusta Coffee | tons | USD | LFOX |
| Sugar | 1 lb | USD cents | NYBoT |
| Sugar | tons | LFOX | |
| Chocolate | tons | GBP | LFOX |
| Chocolate | 1 short ton | USD | NYBoT |
| Rice | 200.00 lbs | USD | CBoT |
| Soya bean | bushel (=60 lb) | USD cents | CBoT |
| Corn (Maizena) | bushel (=56 pounds) | USD | CBoT |
| Soybeans | short ton | USD | CBoT |
| Soybean Oil | tons | USD | CBoT |
| Wheat | 100 kg | GBP | London |
| Wheat | bushel (=60 lb) | USD | CBoT |
| Linseed oil | tons | USD | Rotterdam |
2. Live Animals and Meat
| Commodity | Unit | Currency | Exchange Name |
| Pork belly | 1 lb | USD | CME |
| lean pork | 1 lb | USD | CME |
| Cattle fodder | 1 lb | USD | CME |
| Cattle/cattle | 1 lb | USD | CME |
3. Fuel
| Commodity | Unit | Currency | Exchange Name |
| Light, Sweet Crude Oil | barrels | USD | CME |
| Coal | metric tons | USD | globalCOAL |
| Diesel (max. 0.035% sulfur) | metric tons | USD | CME |
| Gasoline (max. 1.0% sulfur) | metric tons | USD | CME |
| Gasoline (max. 0.2% sulfur) | metric tons | USD | CME |
| Gasoline (max. 3.5% sulfur) | metric tons | USD | CME |
| Brent Crude Oil | barrels | USD | CME |
4. Metal
| Commodity | Unit | Currency | Exchange Name |
| Gold | 1 kg | Rupiah | Jakarta Futures Exchange |
| Gold | troy ons | USD | New York |
| Palladium | troy ons | USD | New York |
| Platinum | troy ons | USD | New York |
| Silver | troy ons | USD | New York |
5. Industrial Metals
| Commodity | Unit | Currency | Exchange Name |
| Tin | metric tons | USD | London Commodity Exchange |
| Copper | metric tons | USD | London Metal Exchange |
| Tin | metric tons | USD | London Commodity Exchange |
| Zinc | metric tons | USD | London Commodity Exchange |
| Aluminum alloy | metric tons | USD | London Commodity Exchange |
| Aluminum alloy | metric tons | USD | London Commodity Exchange |
| Nickel | metric tons | USD | London Commodity Exchange |
| Recycled steel | metric tons | USD | Rotterdam |
| Indium | 1 kg | USD | London Commodity Exchange |
| Germanium | 1 kg | USD | London Commodity Exchange |
| Cobalt | 1 lb | USD | London Commodity Exchange |
| Cadmium | 1 lb | USD | London Commodity Exchange |
That is the explanation of the material Understanding Trade Commodities, Characteristics, Types, Fuel, Industry. Hopefully this explanation provides useful knowledge for readers. Thankyou for read our article.
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