Commodity

In economics, a commodity is an economic good or service that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them.[1] Most commodities are raw materials, basic resources, agricultural, or mining products, such as iron ore, sugar, or grains like rice and wheat. Commodities can also be mass-produced unspecialized products such as chemicals and computer memory.

The price of a commodity good is typically determined as a function of its market as a whole: well-established physical commodities have actively traded spot and derivative markets. The wide availability of commodities typically leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price.[2]

Yerba mate (left), coffee bean (middle) and tea (right), all used for caffeinated infusions, are commodity cash crops.

Mate mit Stängeln
Coffee Beans Photographed in Macro
Loose leaf darjeeling tea twinings

Etymology

The word commodity came into use in English in the 15th century, from the French commodité, "amenity, convenience". Going further back, the French word derives from the Latin commoditas, meaning "suitability, convenience, advantage". The Latin word commodus (from which English gets other words including commodious and accommodate) meant variously "appropriate", "proper measure, time, or condition", and "advantage, benefit".

Characteristics

In economics, the term commodity is used specifically for economic goods or services that have full or partial but substantial fungibility; that is, the market treats their instances as equivalent or nearly so with no regard to who produced them.[3] Karl Marx described this property as follows: "From the taste of wheat, it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist."[4] Petroleum and copper are examples of commodity goods:[5] their supply and demand are a part of one universal market.

Non-commodity items such as stereo systems have many aspects of product differentiation, such as the brand, the user interface and the perceived quality. The demand for one type of stereo may be much larger than demand for another.

The price of a commodity good is typically determined as a function of its market as a whole. Well-established physical commodities have actively traded spot and derivative markets.

Hard and soft commodities

Soft commodities are goods that are grown, such as wheat, or rice.

Hard commodities are mined. Examples include gold, helium, and oil.

Energy commodities include electricity, gas, coal and oil. Electricity has the particular characteristic that it is usually uneconomical to store, and must therefore be consumed as soon as it is processed.

Commoditization

Commoditization occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the intellectual capital necessary to acquire or produce it efficiently. As such, goods that formerly carried premium margins for market participants have become commodities, such as generic pharmaceuticals and DRAM chips. An article in The New York Times cites multivitamin supplements as an example of commoditization; a 50 mg tablet of calcium is of equal value to a consumer no matter what company produces and markets it, and as such, multivitamins are now sold in bulk and are available at any supermarket with little brand differentiation.[6] Following this trend, nanomaterials are emerging from carrying premium profit margins for market participants to a status of commodification.[7]

There is a spectrum of commoditization, rather than a binary distinction of "commodity versus differentiable product". Few products have complete undifferentiability and hence fungibility; even electricity can be differentiated in the market based on its method of generation (e.g., fossil fuel, wind, solar), in markets where energy choice lets a buyer opt (and pay more) for renewable methods if desired. Many products' degree of commoditization depends on the buyer's mentality and means. For example, milk, eggs, and notebook paper are not differentiated by many customers; for them, the product is fungible and lowest price is the main decisive factor in the purchasing choice. Other customers take into consideration other factors besides price, such as environmental sustainability and animal welfare. To these customers, distinctions such as "organic versus not" or "cage free versus not" count toward differentiating brands of milk or eggs, and percentage of recycled content or Forest Stewardship Council certification count toward differentiating brands of notebook paper.

Global commodities trading company

This is a list of companies trading globally in commodities, descending by size as of October 28, 2011.[8]

  1. Vitol
  2. Glencore International AG
  3. Trafigura
  4. Cargill
  5. Salam Investment
  6. Archer Daniels Midland
  7. Gunvor (company)
  8. Mercuria Energy Group
  9. Noble Group
  10. Louis Dreyfus Group
  11. Bunge Limited
  12. Wilmar International
  13. Olam International

Commodity trade

In the original and simplified sense, commodities were things of value, of uniform quality, that were produced in large quantities by many different producers; the items from each different producer were considered equivalent. On a commodity exchange, it is the underlying standard stated in the contract that defines the commodity, not any quality inherent in a specific producer's product.

Commodities exchanges include:

Markets for trading commodities can be very efficient, particularly if the division into pools matches demand segments. These markets will quickly respond to changes in supply and demand to find an equilibrium price and quantity. In addition, investors can gain passive exposure to the commodity markets through a commodity price index.

In order to diversify their investments and mitigate the risks associated with inflationary debasement of currencies, pension funds and sovereign wealth funds allocate capital to non-listed assets such as a commodities and commodity-related infrastructure.[9]

Inventory data

The inventory of commodities, with low inventories typically leading to more volatile future prices and increasing the risk of a "stockout" (inventory exhaustion). According to economist theorists, companies receive a convenience yield by holding inventories of certain commodities. Data on inventories of commodities are not available from one common source, although data is available from various sources. Inventory data on 31 commodities was used in a 2006 study on the relationship between inventories and commodity futures risk premiums.[10]

Commodification of labor

In classical political economy and especially in Karl Marx's critique of political economy, a commodity is an object or a good or service ("product" or "activity"[11]) produced by human labour.[12] Objects are external to man.[13] However, some objects attain "use value" to persons in this world, when they are found to be "necessary, useful or pleasant in life,"[14] "Use value" makes an object "an object of human wants,"[15] or is "a means of subsistence in the widest sense".[16]

As society developed, people found that they could trade goods and services for other goods and services. At this stage, these goods and services became "commodities". Commodities are defined as objects which are offered for sale or are "exchanged in a market".[17] In the marketplace, where commodities are sold, "use value" is not helpful in facilitating the sale of commodities. Accordingly, in addition to having use value, commodities must have an "exchange value"—a value that could be expressed in the market.[18]

Prior to Marx, many economists debated as to what elements made up exchange value. Adam Smith maintained that exchange value was made up of rent, profit, labour and the costs of wear and tear on the instruments of husbandry.[19] David Ricardo, a follower of Adam Smith, modified Smith's approach on this point by alleging that labour alone is the content of the exchange value of any good or service.[20] While maintaining that all exchange value in commodities was derived directly from the hands of the people that made the commodity, Ricardo noted that only part of the exchange value of the commodity was paid to the worker who made the commodity. The other part of the value of this particular commodity was labour that was not paid to the worker—unpaid labour. This unpaid labour was retained by the owner of the means of production. In capitalist society, the capitalist owns the means of production and therefore the unpaid labour is retained by the capitalist as rent or as profit. The means of production means the site where the commodity is made, the raw products that are used in the production and the instruments or machines that are used for the production of the commodity.

However, not all commodities are reproducible nor were all commodities originally intended to be sold in the market. These priced goods are also treated as commodities, e.g. human labour-power, works of art and natural resources ("earth itself is an instrument of labour"),[21] even though they may not be produced specifically for the market, or be non-reproducible goods.

Marx's analysis of the commodity is intended to help solve the problem of what establishes the economic value of goods, using the labor theory of value. This problem was extensively debated by Adam Smith, David Ricardo[22] and Karl Rodbertus-Jagetzow among others.

All three of the above-mentioned economists rejected the theory that labour composed 100% of the exchange value of any commodity. In varying degrees, these economists turned to supply and demand to establish the price of commodities. Marx held that the "price" and the "value" of a commodity were not synonymous. Price of any commodity would vary according to the imbalance of supply to demand at any one period of time. The "value" of the same commodity would be consistent and would reflect the amount of labour value used to produce that commodity.

Prior to Marx, economists noted that the problem with using the "quantity of labour" to establish the value of commodities was that the time spent by an unskilled worker would be longer than the time spent on the same commodity by a skilled worker. Thus, under this analysis, the commodity produced by an unskilled worker would be more valuable than the same commodity produced by the skilled worker. Marx pointed out, however, that in society at large, an average amount of time that was necessary to produce the commodity would arise. This average time necessary to produce the commodity Marx called the "socially necessary labour time"[23] Socially necessary labour time was the proper basis on which to base the "exchange value" of a given commodity.

Value and price are not equivalent terms in economics, and theorising the specific relationship of value to market price has been a challenge for both liberal and Marxist economists. However, Marx held that the value and price of any commodity would coincide only when demand and supply were equivalent to each other.

See also

Notes

  1. ^ "Learn What Commodities Are in These Examples!".
  2. ^ "Commodity definition". Merriam-Webster. Retrieved 30 July 2018.
  3. ^ "Learn What Commodities Are in These Examples!".
  4. ^ Karl Marx, "A Contribution to the Critique of Political Economy" contained in the Collected Works of Karl Marx and Frederick Engels: Volume 29, p. 270.
  5. ^ O'Sullivan, Arthur; Steven M. Sheffrin (2004). Economics: Principles in action. Pearson / Prentice Hall. ISBN 0-13-063085-3.
  6. ^ Natasha Singer; Peter Lattman (15 March 2013). "Workout Supplement Challenged". The New York Times. Retrieved 17 March 2013.
  7. ^ C. McGovern, ″Commoditization of nanomaterials″. Nanotechnology Perceptions 6 (2010) 155–178.
  8. ^ "Corrected: Commodity Traders: The trillion dollar club". Reuters. Oct 28, 2011. Retrieved 2008-06-12.
  9. ^ M. Nicolas Firzli & Vincent Bazi (2011). "Infrastructure Investments in an Age of Austerity : The Pension and Sovereign Funds Perspective". Revue Analyse Financière, volume 41. . Archived from the original on 17 September 2011. Retrieved 30 July 2011.
  10. ^ Gorton GB et al. (2008). The Fundamentals of Commodity Futures Returns. Yale ICF Working Paper No. 07-08.
  11. ^ Karl Marx, "Outlines of the Critique of Political Economy" contained in the Collected Works of Karl Marx and Frederick Engels: Volume 28, 80.
  12. ^ Karl Marx, Capital, Volume I (International Publishers: New York, 1967) p. 38 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35 (International Publishers: New York, 1996) p. 48.
  13. ^ Karl Marx, Capital, Volume I, p. 87 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 97.
  14. ^ Aristotle, Politica (Oxford, 1966) p. 1257.
  15. ^ Karl Marx, "Capital in General: The Commodity" contained in the Collected works of Karl Marx and Frederick Engels: Volume 29 (International Publishers: New York, 1987) p. 269.
  16. ^ Karl Marx, "Capital in General: The Commodity" contained in the Collected Works of Karl Marx and Frederick Engels: Volume 29, p. 269.
  17. ^ Karl Marx, Capital: Volume I p. 36 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 46.
  18. ^ Adam Smith, Wealth of Nations (Pelican Books: London, 1970) p. 131 and David Ricardo, Principles of Political Economy and Taxation (Pelican Books: 1971, London) p. 55.
  19. ^ Adam Smith, Wealth of Nations (Pelican Books: London, 1970) p. 153.
  20. ^ David Ricardo, Principles of Political Economy and Taxation (Pelican Books: London, 1971) pp. 56-58.
  21. ^ Karl Marx, Capital: Volume I, p. 179 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 189.
  22. ^ David Ricardo, Principles of Political Economy and Taxation (Pelican Books, London, 1971) pp. 56-58.
  23. ^ Karl Marx, Capital: Volume I, p. 39 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 49.

External links

Cash crop

A cash crop or profit crop is an agricultural crop which is grown to sell for profit. It is typically purchased by parties separate from a farm. The term is used to differentiate marketed crops from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family. In earlier times cash crops were usually only a small (but vital) part of a farm's total yield, while today, especially in developed countries, almost all crops are mainly grown for revenue. In the least developed countries, cash crops are usually crops which attract demand in more developed nations, and hence have some export value.

Prices for major cash crops are set in commodity markets with global scope, with some local variation (termed as "basis") based on freight costs and local supply and demand balance. A consequence of this is that a nation, region, or individual producer relying on such a crop may suffer low prices should a bumper crop elsewhere lead to excess supply on the global markets. This system has been criticized by traditional farmers. Coffee is an example of a product that has been susceptible to significant commodity futures price variations.

Chicago Board of Trade

The Chicago Board of Trade (CBOT), established on April 3, 1848, is one of the world's oldest futures and options exchanges. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and electronic trading. Volumes at the exchange in 2003 were a record breaking 454 million contracts. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form the CME Group. CBOT and three other exchanges (CME, NYMEX, and COMEX) now operate as designated contract markets (DCM) of the CME Group.

Commodity (Marxism)

In classical political economy and especially Karl Marx's critique of political economy, a commodity is any good or service ("products" or "activities") produced by human labour and offered as a product for general sale on the market. Some other priced goods are also treated as commodities, e.g. human labor-power, works of art and natural resources, even though they may not be produced specifically for the market, or be non-reproducible goods.

Marx's analysis of the commodity is intended to help solve the problem of what establishes the economic value of goods, using the labor theory of value. This problem was extensively debated by Adam Smith, David Ricardo, and Karl Rodbertus-Jagetzow, among others. Value and price are not equivalent terms in economics, and theorising the specific relationship of value to market price has been a challenge for both liberal and Marxist economists.

Commodity Futures Trading Commission

The U.S. Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974, that regulates futures and option markets.

The Commodities Exchange Act ("CEA"), 7 U.S.C. § 1 et seq., prohibits fraudulent conduct in the trading of futures contracts. The stated mission of the CFTC is to foster open, transparent, competitive, and financially sound markets, to avoid systemic risk, and to protect the market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act.

After the Financial crisis of 2007–2008 and since 2010 with the Dodd–Frank Wall Street Reform and Consumer Protection Act, CFTC has been transitioning to bring more transparency and stricter regulation to the multitrillion dollar swaps market.

Commodity fetishism

In Karl Marx's critique of political economy, commodity fetishism is the perception of the social relationships involved in production not as relationships among people, but as economic relationships among the money and commodities exchanged in market trade. As such, commodity fetishism transforms the subjective, abstract aspects of economic value into objective, real things that people believe have intrinsic value.The theory of commodity fetishism is presented in the first chapter of Das Kapital (English: Capital. Critique of Political Economy) (1867), at the conclusion of the analysis of the value-form of commodities, to explain that the social organization of labor is mediated through market exchange, the buying and the selling of commodities (goods and services). Hence, in a capitalist society, social relations between people—who makes what, who works for whom, the production-time for a commodity, et cetera—are perceived as economic relations among objects, that is, how valuable a given commodity is when compared to another commodity. Therefore, the market exchange of commodities obscures the true economic character of the human relations of production, between the worker and the capitalist.Marx explained the philosophic concepts underlying commodity fetishism thus:

As against this, the commodity-form, and the value-relation of the products of labour within which it appears, have absolutely no connection with the physical nature of the commodity and the material relations arising out of this. It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. In order, therefore, to find an analogy we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men's hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and is therefore inseparable from the production of commodities.

Commodity market

A commodity market is a market that trades in primary economic sector rather than manufactured products. Soft commodities are agricultural products such as wheat, coffee, cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Investors access about 50 major commodity markets worldwide with purely financial transactions increasingly outnumbering physical trades in which goods are delivered. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets. Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.A financial derivative is a financial instrument whose value is derived from a commodity termed an underlier. Derivatives are either exchange-traded or over-the-counter (OTC). An increasing number of derivatives are traded via clearing houses some with Central Counterparty Clearing, which provide clearing and settlement services on a futures exchange, as well as off-exchange in the OTC market.Derivatives such as futures contracts, Swaps (1970s-), Exchange-traded Commodities (ETC) (2003-), forward contracts have become the primary trading instruments in commodity markets. Futures are traded on regulated commodities exchanges. Over-the-counter (OTC) contracts are "privately negotiated bilateral contracts entered into between the contracting parties directly".Exchange-traded funds (ETFs) began to feature commodities in 2003. Gold ETFs are based on "electronic gold" that does not entail the ownership of physical bullion, with its added costs of insurance and storage in repositories such as the London bullion market. According to the World Gold Council, ETFs allow investors to be exposed to the gold market without the risk of price volatility associated with gold as a physical commodity.

Commodity money

Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects that have value in themselves (intrinsic value) as well as value in their use as money.Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, tea, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, silk, candy, nails, cocoa beans, cowries and barley. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or price system economies.

Dalian Commodity Exchange

The Dalian Commodity Exchange (DCE) (simplified Chinese: 大连商品交易所; traditional Chinese: 大連商品交易所; pinyin: Dàlián Shāngpǐn Jiāoyìsuǒ) is a Chinese futures exchange based in Dalian, Liaoning province, China. It is a non-profit, self-regulating and membership legal entity established on February 28, 1993.

Dalian Commodity Exchange trades in futures contracts underlined by a variety of agricultural and industrial produce on a national scale. As of 2015, DCE has listed a total of 16 futures products, including corn, corn starch, soybean (gmo and non-gmo), soybean meal, soybean oil, RBD palm olein, egg, fiberboard, blockboard, linear low-density polyethylene (LLDPE), polyvinyl chloride (PVC), polypropylene (PP), coke, coking coal and iron ore.

Normal trading hours are Monday-Friday from 9am to 11:30am and 1:30pm to 3pm Beijing Time.

Exchange value

In political economy and especially Marxian economics, exchange value (German: Tauschwert) refers to one of four major attributes of a commodity, i.e., an item or service produced for, and sold on the market. The other three aspects are use value, economic value, and price.Thus, a commodity has:

a value (note the link is to a non-Marxian definition of value)

a use value (or utility)

an exchange value

a price (it could be an actual selling price or an imputed ideal price)These four concepts have a very long history in human thought, from Aristotle to David Ricardo, becoming ever more clearly distinguished as the development of commercial trade progressed but have largely disappeared as four distinct concepts in modern economics. This entry focuses on Marx's summation of the results of economic thought about exchange-value.

Futures contract

In finance, a futures contract (more colloquially, futures) is a standardized forward contract, a legal agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price the parties agree to buy and sell the asset for is known as the forward price. The specified time in the future—which is when delivery and payment occur—is known as the delivery date. Because it is a function of an underlying asset, a futures contract is a derivative product.

Contracts are negotiated at futures exchanges, which act as a marketplace between buyers and sellers. The buyer of a contract is said to be long position holder, and the selling party is said to be short position holder. As both parties risk their counter-party walking away if the price goes against them, the contract may involve both parties lodging a margin of the value of the contract with a mutually trusted third party. For example, in gold futures trading, the margin varies between 2% and 20% depending on the volatility of the spot market.The first futures contracts were negotiated for agricultural commodities, and later futures contracts were negotiated for natural resources such as oil. Financial futures were introduced in 1972, and in recent decades, currency futures, interest rate futures and stock market index futures have played an increasingly large role in the overall futures markets.

The original use of futures contracts was to mitigate the risk of price or exchange rate movements by allowing parties to fix prices or rates in advance for future transactions. This could be advantageous when (for example) a party expects to receive payment in foreign currency in the future, and wishes to guard against an unfavorable movement of the currency in the interval before payment is received.

However, futures contracts also offer opportunities for speculation in that a trader who predicts that the price of an asset will move in a particular direction can contract to buy or sell it in the future at a price which (if the prediction is correct) will yield a profit.

Futures exchange

A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of contracts fall into the category of derivatives. The opposite of the futures market is the spots market, where trades will occur immediately (2 business days) after a transaction agreement has been made, rather than at a predetermined time in the future.

Futures instruments are priced according to the movement of the underlying asset (stock, physical commodity, index, etc.). The aforementioned category is named "derivatives" because the value of these instruments are derived from another asset class.

Money

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfils these functions can be considered as money.

Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private". Counterfeit money can cause good money to lose its value.

The money supply of a country consists of currency (banknotes and coins) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of broad money in developed countries.

Multi Commodity Exchange

Multi Commodity Exchange of India Ltd (MCX) (BSE: 534091) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. It is India's largest commodity derivatives exchange where the clearance and settlements of the exchange happens and the turnover of the exchange for quarter ended September 2018 was 1.78 billion rupees. MCX offers options trading in gold and futures trading in non-ferrous metals, bullion, energy, and a number of agricultural commodities (mentha oil, cardamom, crude palm oil, cotton and others).

In 2016, MCX was seventh among the global commodity bourses in terms of the number of futures contracts traded, the latest yearly data from Futures Industry Association (FIA) showed. In 2017 MCX partnered with Thomson Reuters to develop India’s first co-branded commodity index series, the iCOMDEX. iCOMDEX series consists of iCOMDEX Composite, iCOMDEX Base Metals, iCOMDEX Bullion, iCOMDEX Gold, iCOMDEX Copper and iCOMDEX Crude Oil. Recently, the exchange has set up a web-based application “ComRIS” (Commodity Receipts Information System) in order to maintain electronic record of commodities deposited at the Exchange accredited warehouses and ensure flow of real time information from the warehouses.

In February 2012, MCX had come out with a public issue of 6,427,378 Equity Shares of Rs. 10 face value in price band of Rs. 860 to Rs. 1032 per equity share to raise around $134 million. It was the first ever IPO by an Indian exchange and made MCX India’s only publicly listed exchange.

From September 28, 2015, MCX is being regulated by the Securities and Exchange Board of India (SEBI). Earlier MCX was regulated by the Forward Markets Commission (FMC), which got merged with the SEBI on September 28, 2015.

Multi-Commodity Exchange appointed of Mrugank Paranjape as MD & CEO of the exchange on February 29, 2016 for a period of three years. Mrugank Paranjape has earlier working with Deutsche Bank for last 14 years. Last he was heading DB Center of the bank.Commodities traded include -

Metal - Aluminium, Aluminium Mini, Copper, Copper Mini, Lead, Lead Mini, Nickel, Nickel Mini, Zinc, Zinc Mini,Brass(futures)

Bullion - Gold, Gold Mini, Gold Guinea, Gold Petal, Gold Petal ( New Delhi), Gold Global, Silver, Silver Mini, Silver Micro, Silver 1000.

Agro Commodities - Cardamom, Cotton, Crude Palm Oil, Kapas, Mentha Oil, Castorseed, RBD Palmolien, Black Pepper.

Energy - Brent Crude Oil, Crude Oil, Crude Oil Mini, Natural Gas.Multi Commodity Exchange of India provides live feeds for all traded commodities and these are published on various websites like MoneyControl.com, Economictimes.Indiatimes.com, McxIndia.info

Pension fund

A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income.

Pension funds typically have large amounts of money to invest and are the major investors in listed and private companies. They are especially important to the stock market where large institutional investors dominate. The largest 300 pension funds collectively hold about $6 trillion in assets. In January 2008, The Economist reported that Morgan Stanley estimates that pension funds worldwide hold over US$20 trillion in assets, the largest for any category of investor ahead of mutual funds, insurance companies, currency reserves, sovereign wealth funds, hedge funds, or private equity.The Federal Old-age and Survivors Insurance Trust Fund is the world's largest public pension fund which oversees $2.743 trillion USD in assets.

Raw material

A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished products, energy, or intermediate materials which are feedstock for future finished products. As feedstock, the term connotes these materials are bottleneck assets and are highly important with regard to producing other products. An example of this is crude oil, which is a raw material and a feedstock used in the production of industrial chemicals, fuels, plastics, and pharmaceutical goods; lumber is a raw material used to produce a variety of products including all types of furniture.Metallic raw material production follows the processes such as crushing, roasting, magnetic separation, flotation, and leaching (at the first step), smelting and alloying (at the second step). The term "raw material" denotes materials in minimally processed or unprocessed in states; e.g., raw latex, crude oil, cotton, coal, raw biomass, iron ore, air, logs, or water i.e. "...any product of agriculture, forestry, fishing and any other mineral that is in its natural form or which has undergone the transformation required to prepare it for internationally marketing in substantial volumes."Places with plentiful raw materials and little economic development often show a phenomenon, known as "Dutch disease" or the "resource curse", that occurs when the economy of a country is mainly based upon its exports due to its method of governance. An example of this is the Democratic Republic of Congo as it is rich in raw materials; the Second Congo War focused on controlling these raw materials.Raw materials are also used by non-humans, such as birds using found objects and twigs to create nests.

Sovereign wealth fund

A sovereign wealth fund (SWF) or sovereign investment fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank. By historic convention, the United States' Social Security Trust Fund, with US$2.8 trillion of assets in 2014, and similar vehicles like Japan Post Bank's JP¥200 trillion of holdings, are not considered sovereign wealth funds.

Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation's banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return, and that may not have a significant role in fiscal management.

The accumulated funds may have their origin in, or may represent, foreign currency deposits, gold, special drawing rights (SDRs) and International Monetary Fund (IMF) reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings. These are assets of the sovereign nations that are typically held in domestic and different reserve currencies (such as the dollar, euro, pound, and yen). Such investment management entities may be set up as official investment companies, state pension funds, or sovereign funds, among others.

There have been attempts to distinguish funds held by sovereign entities from foreign-exchange reserves held by central banks. Sovereign wealth funds can be characterized as maximizing long-term return, with foreign exchange reserves serving short-term "currency stabilization", and liquidity management. Many central banks in recent years possess reserves massively in excess of needs for liquidity or foreign exchange management. Moreover, it is widely believed most have diversified hugely into assets other than short-term, highly liquid monetary ones, though almost no data is publicly available to back up this assertion. Some central banks have even begun buying equities, or derivatives of differing ilk (even if fairly safe ones, like overnight interest rate swaps).

Speculation

Speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable in the near future. In finance, speculation is also the practice of engaging in risky financial transactions in an attempt to profit from short term fluctuations in the market value of a tradable financial instrument—rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, dividends, or interest.

Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. Speculation can in principle involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

Speculators play one of four primary roles in financial markets, along with hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument's underlying attributes.

Trader (finance)

For information about the moral problem of trading it is necessary to refer to the public contents on web.

A trader is person or entity, in finance, who buys and sells financial instruments such as stocks, bonds, commodities, derivatives, and mutual funds in the capacity of agent, hedger, arbitrageur, or speculator.

Zhengzhou Commodity Exchange

Zhengzhou Commodity Exchange (ZCE; Chinese: 郑州商品交易所), established in 1990, is a futures exchange in Zhengzhou, one of the four futures exchanges in China. The ZCE is under the vertical management of China Securities Regulatory Commission (CSRC).

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