Topics in CommerceOutbound Marketing explained Inbound Marketing explained Production - Types of Production Commerce: Definitions and Scopes of Commerce Differences between Balance of Trade and Balance of Payments Balance of Payment Deficit and Balance of Payment Surplus Disadvantages of Foreign Trade Divisions of Foreign Trade Advantages of Foreign Trade What is Foreign Trade? Types of Foreign Trade Scheme of Work for Commerce, SS1, First Term Scheme of work for Commerce, SS1, Second Term Scheme of work for Commerce, SS1, Third Term Division of Labour: What is Division of Labour? Forms, Advantages and Disadvantages of Division of Labour Balance of Trade and Balance of Payments Production: Definitions and Examples of Production Deferred payment and its benefits Commodity Market, Types and Importance of Commodity Market What is Marketing? Branches of Marketing
Academic Questions in Commerce
The followings are advantages of division of labour EXCEPT _____.
Which of the following statement is incorrect concerning division of labour?
What does a bearer cheque mean?
What is an order cheque?
First, let's look at the words "commodity" and "market" before we juxtapose both terms.
A commodity is any product with market value.
Such products can be bought or sold with money.
For an item to be considered a commodity, it must satisfy three conditions:
It must be standardized. (Agricultural commodities must be in it's unprocessed state).
It must be usable upon delivery
Its price must vary.
Note: A market is a place where the transaction of goods and services are carried out.
A commodity market is a therefore a place where people buy and sell homogenous goods in large quantities.
Homogeneous goods are products that has essentially the same physical characteristics and quality as similar products from other brands.
Recently, foreign currencies, data and bandwidth have been included as part of today's commodity markets. A commodity market will have it's own set of rules and regulations.
Hard commodities: They include goods extracted from earth’s crust via mining processes. Examples of such commodities are crude oil, gold and diamond
Soft commodities: They include all agricultural products and produce. Examples are chicken, wheat and grains.
MCX mainly trade hard commodities whereas NCDEX trade soft commodities.
Note: Commodity markets don't set prices of traded commodities. Instead, it is the supply and demand of commodities that determine their prices.
Recall that commodities are the raw materials. When processed, they are used by everyone. For instance, petroleum is the commodity for generating petrol and cooking gas; cotton is the commodity for making clothes and so on. These raw materials (commodities) at one point had probably once interacted with a commodity exchange.
Commodity exchange prices often influence the prices of numerous goods. In fact, changes in commodity prices can affect an entire segments of an economy, bringing the government into play. For instance, Government may offer subsidies for a product like PMS (petrol) or change tax rates.
Have you ever wondered why most buyers and sellers trade commodities on the futures markets? This is so because many traditional commodities like grains and wheat bear the risk of a "negative price change" when their products are finally ready for the market. Based on this uncertainty, Futures contracts come into play in the sense that the buyer buys the right to receive a specific quantity of the commodity at a specific period of time.
The above process will offer price stability to commodity producers and commodity users.
THANKS FOR READING - Please Help Share!
Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.
Amazing facts in Commerce
Amazon is an e-commerce website launched in 1995. It did not make any profit for its first seven years.
Amazon's first profit was in 2003. Its founder "Jeff Bezos" is the richest man in the world as at 2018/2019
NOTABLE POINTS IN Commerce
Commerce can be defined as the exchange of goods and services, usually for money and on a large scale that will require the transportation of such goods and services.
Commerce is very important to the life of any Nation for the following reasons:
A public company is not owned by an individual. Usually, it is owned by groups or a very large number of people.
The shares of a public company are traded freely on the stock exchange.
Below are some features of a public company
The four elements of the marketing mix are usually referred to as the 4 “P”. These are:
Think of marketing mix as the set of marketing tools that an industry or company uses to drive or accomplish its marketing objectives in the target market