comodity
What is a Commodity? If we look at the legal definition of a commodity, it is defined as ‘ a tangible item that may be bought or sold; something produced for commerce’ . Therefore, commodities are considered to be marketable goods or wares, such as raw or partially processed materials, farm products, or even jewellery. Intangibles, such as human labour, services, or marketing & advertising, are typically not considered to be commodities. Where, when and what – the fundamentals of commodity pricing? End-users buy physical commodities to meet staple needs. The commodity has to be fit for purpose and it needs to be available. These requirements determine the three pillars for pricing: • Where: delivery location • When: delivery timing • What: the product quality or grade Commodity trading firms bridge gaps between producers and consumers based on these three pillars, through transformations in space, time and form. • Space: transport...