Commodities are fundamental goods utilized in commerce that can be exchanged with other goods of the same kind. They serve as essential inputs in the production of various goods and services. While the quality of a specific commodity may vary slightly, it remains largely consistent across different producers. Commodities are generally traded on exchanges, with their prices subject to fluctuations driven by supply and demand dynamics.
Commodities can be categorized into different types:
- Soft Commodities: These include agricultural products such as coffee, sugar, cocoa, and tobacco.
- Hard Commodities: These encompass natural resources like oil, metals, and gas.
- High-Value Commodities: These are items characterized by significant profit margins, limited supply, or strong market demand, such as gold, diamonds, and luxury goods.