Commodity Exchange (Definition & Classification of Commodity)

Meaning of Commodity

Commodity is a material in a specified quantity which has universally standardized quality and price for exchange purpose. The commodities are materials of value which can be traded for their value at a particular time and at a pre-determined price. Commodity possesses price and quality which are based on global or universal supply and demand. Commodity is specifically applied to goods.

Classification of Commodities

(i) Soft Commodities: These are basically agricultural goods grown or reared for human consumption e.g. food crops, cash, and livestock. Cash crops are sold in foreign markets at a standardized price.

(ii) Hard Commodities: These are solid materials which are extracted by mining e.g. Iron, gold, zinc, silver copper, tin, etc.

(iii) EnergyEnergy is the ability to do work. Energy exists in several forms such as heat, kinetic or mechanical energy, light, potential energy, and electrical energy. Units of Energy: The SI unit... More Commodities: Commodities of this nature are generated from certain sources for the purpose of domestic or industrial consumption as soon as they are produced because of their non-lasting nature.

Commodity Exchange (Definition)

Commodity Exchange is an organized process and procedure where buyers and sellers of tradable commodities come into contact to exchange such commodities at a pre-determined value (price) and standard.