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Business basics: Commodity

April 30th, 2014

 

 

A commodity is any good exchanged during business, and is interchangeable with other goods of the same type. The quality of a commodity, such as water, may differ slightly, but it’s still considered to be uniform and valuable despite various companies. There are two main types of commodities: hard and soft. Hard commodities are those that need to be mined, like gold, silver and oil. Soft commodities are agricultural, such as meat, coffee or wheat. Water is considered to be an emerging commodity– something that is expected to become a booming market in the near future. Other emerging commodities are solar and wind power, for instance. Commodities also can include financial products, such as foreign currencies and indexes.

 

– Information compiled by Katii Sheffield