What is the Commodity? – Definition of Commodity


Definition of Commodity


What is the 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.

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. Most commodities are raw materials, basic resources, or agricultural products, such as iron ore, sugar, or rice.

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.

Definition of Commodity