Defining commodities

Dear Members,

Commodities are divided into two broad categories — hard commodities, which are made up of natural resources that are extracted or mined; and soft commodities which are generally agricultural products that are grown.

These two categories are further divided into four groups — metals and energy within hard commodities; agricultural, livestock, and meat within soft commodities.

** The list above shows only a few examples. In reality, each group is made up of many more individual products.*

The value of each commodity depends on several factors, including supply and demand. But because commodities are raw materials, natural events like floods or pandemics can also have a significant impact on the value of a commodity. For example, a flood can affect the production of crops leading to less supply, or a worldwide pandemic affects the demand for oil as travel becomes restricted.

Hope this information is useful :slight_smile:

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