The expression commodity – Portuguese as “commodtie” – is an English term that means good or product and serves to designate the set of primary goods traded on the financial market of the stock exchanges. In the context of economics, this is one of the most frequent concepts used in reference to the dynamics of product prices.
The difference between raw materials and commodities is that the first term is used to refer to any primary goods without having economic rigor. When economically converted into a commodity, a raw material or product starts to have a fixed standard unit value, which is usually carried out from a base price set on a major international stock exchange.
For example, consider the following sentence: "the price of arroba do boi has risen considerably in recent months and is compromising the entire national market”. In this case, the beef is the raw material and the “arroba de ox” is the commodity. Therefore, whenever we talk about soybeans, oil, gold or any other product in terms of fixed values, we are referring to examples of commodities.
It is not necessary, therefore, to work very hard to understand the degree of importance of commodities for national and international economic dynamics. After all, their price is capital for determining the prices of products originating from their respective raw materials, affecting export and import dynamics and reflecting on the different levels of Marketplace.
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If, for example, the price of sugarcane on the international market rises, it means that the profitability of this commodity will increase, which leads producers to give priority to this product and, in this case, preferentially allocate it to the market International. Because of this, the price of its derivatives (sugar and ethanol) also rises in the domestic market and affects other by-products (food and transport).
In the context of International Division of Labor, some countries are highly dependent on commodities for export, especially peripheral countries with little industrialization. Others, despite not being that dependent, are also quite affected by their price variation, which includes Brazil. Some of the developed countries, on the other hand, depend on commodities for importation, both for converting their raw materials into goods and for direct consumption.
At main commodities in Brazil they are soy, sugar cane, coffee, iron ore, beef, cocoa, aluminum and a few others. In the world context, the main commodity is the Petroleum, a fundamental and strategic raw material for the development of most countries.
By Me. Rodolfo Alves Pena
Would you like to reference this text in a school or academic work? Look:
PENA, Rodolfo F. Alves. "Commodities"; Brazil School. Available in: https://brasilescola.uol.com.br/geografia/commodities.htm. Accessed on June 27, 2021.
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