COMMODITY EXCHANGE
CONTENT
- Meaning of Commodity
- Types of Commodity
- Meaning of Commodity Exchange
- Meaning of Tradable Commodity
- Distinctions between Tradable and Non-tradable Commodities
- Requirements for Trading in Commodity Exchange
- Types of Commodity Exchange
- Methods of Trading
Meaning of Commodity
Commodity is any good or material produced to satisfy wants or needs. Commodities may also be defined as materials or products that can be traded or exchanged for value at a particular time and at a pre-determined price. Any material or anything regarded as commodity must possess standard quality and price. For instance, gold, silver are commodities because they have standardized quality and price which are objective and are determined in line with local or international standard. Commodity is used to describe a class of goods for which there is demand but which is supplied without qualitative differentiation across a market.
However, gold jewellery is not a commodity because the price is subjective depending on factors such as design, period of sale, etc.
Types of Commodity
Commodities are basically classified or divided into three categories.
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Halima Ahmadu