Commodity 48218 221830882 2008-06-26T08:30:47Z Hintgergedani 7307698 {{Unreferenced|date=June 2007}} {{for|the Marxist definition of a commodity|Commodity (Marxism)}} A '''commodity''' is anything for which there is demand, but which is supplied without qualitative differentiation across a market. In other words, copper is copper. Rice is rice. Stereos, on the other hand, come in many varieties of quality. And, the better a stereo is, the more it will cost. Whereas, the price of copper is universal, and fluctuates daily based on global supply and demand. One of the characteristics of a commodity good is that its price is determined as a function of its market as a whole. Well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and [[agriculture|agricultural]] products such as [[iron ore]], [[crude oil]], [[coal]], [[ethanol]], [[sugar]], [[coffee beans]], [[soybeans]], [[aluminum]], [[rice]], [[wheat]], [[gold]] and [[silver]]. [[Commoditization]] occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the [[intellectual capital]] necessary to acquire or produce it efficiently. As such, goods that formerly carried premium [[margin]]s for [[market]] [[participant]]s have become commodities, such as [[Generic brand|generic]] pharmaceuticals and [[silicon chip]]s. Linguistically, the word commodity came into use in English in the 15th century, derived from the French word "[[:fr:commodité|commodité]]", similar in meaning to "[[convenience]]" in terms of quality of services. The Latin root meaning is ''commoditas'', referring variously to the appropriate measure of something; a fitting state, time or condition; a good quality; efficaciousness or propriety; and advantage, or benefit. The German equivalent is ''die Ware'', i.e. wares or goods offered for sale. The French equivalent is "produit de base" or "matière première" like energy, goods, or industrial raw materials. A commodity's value changes over time. ==Commodity trade== {{Main|Futures exchange}} In the original and simplified sense, '''''commodities''''' were things of value, of uniform quality, that were produced in large quantities by many different producers; the items from each different producer are considered equivalent. It is the [[contract]] and this underlying standard that define the commodity, not any quality inherent in the [[product (business)|product]]. [[Commodities exchange]]s include: *[[Chicago Board of Trade]] *[[Euronext.liffe]] *[[London Metal Exchange]] *[[New York Mercantile Exchange]] *[[Multi Commodity Exchange]] *[[Dalian Commodity Exchange]] [[Commodity markets|Markets for trading commodities]] can be very [[economic efficiency|efficient]], particularly if the division into pools matches demand [[market segmentation|segments]]. These markets will quickly respond to changes in [[supply and demand]] to find an [[Economic equilibrium|equilibrium]] [[price]] and quantity. In addition, investors can gain passive exposure to the commodity markets through a [[commodity price index]]. ==See also== {{Wiktionary}} * [[List of traded commodities]] * [[Commodity fetishism]] * [[Commodity markets]] * [[Commodity money]] * [[Commodity price index]] * [[Trade]] * [[Jim Rogers]] (commodities expert) * ''[[Trading Places]]'' - comedic film about playing the commodity markets ==External links== *[http://www.indexmundi.com/commodities/ Historical Commodity Prices], indexmundi.com. [[Category:Commodities used as an investment|*]] [[Category:Business terms]] {{econ-stub}} [[br:Marc'hadourezh]] [[de:Handelsware]] [[es:Commodities]] [[fr:matière première]] [[id:Komoditi]] [[it:Commodity]] [[nl:Commodities]] [[pt:Commodity]] [[sv:Handelsvara]] [[tr:Meta]] [[yi:קאמאדיטי]]