AGRI-5-INTRODUCTION-TO-COMMODITY-AND-ENTERPRISE-DEVELOPMENT.pptx

INTRODUCTION-TO-COMMODITY-AND-ENTERPRISE-DEVELOPMENT.
WHAT IS COMMODITY

1. WHAT IS COMMODITY?

2. Commodity is a basic good used in commerce that is interchangeable with other goods of the same type Commodity are most often used as inputs in the production of other goods or services The quality of a given commodity may differ slightly, but it is essentially uniform across producers When they are traded on an exchange, commodities must also meet specified minimum standards also known as basic trade

3. TYPES OF COMMODITIES

4. SOFT COMMODITIES Are those grown e.g. Hogs, Corn, Wheat A very volatile market and not easy to predict HARD COMMODITIES Are those mined or extracted e.g. Crude oil, Gold or Copper

5. FUNGIBILITY It refers to the ability of a product whose individual units are capable of mutual substitution For instance, Gold in New York is the same as gold in China, as long as it is of the same purity

6. TYPES OF TRADERS

7. BUYERS AND PRODUCERS OF COMMODITIES Uses commodity futures contracts for the hedging purposes for which they were originally intended These traders take or make the delivery of the actual commodity when the futures contract expires For example, the wheat farmer that plants a crop can hedge against the risk of losing money if the price of wheat falls before the crop is harvested The farmer can sell wheat futures contracts when the crop is planted and guarantee a predetermined price for the wheat at the time it is harvested

8. SPECULATOR These are traders who trade in the commodities markets for the sole purpose of profiting from the volatile price movements These traders never intend to make or take delivery of the actual commodity when the future contract expires

9. WHAT IS AGRICULTURAL COMMODITY? Agricultural commodities are staple crops and animals produced or raised on farm or plantations Most agricultural commodities such as grains, livestock and dairy provide a source of food for people and animals across the globe The commodities are a vital part of our existence; probably even more than we realize

10. IMPORTANCE OF AGRICULTURAL COMMODITY Virtually, every living being on the planet depends on the agricultural industry in one way or another We eat the grains, fruits, vegetables and livestock that farmers produce; build the frames of our houses from lumber; make clothes from cotton and wool; and ride in cars with tires made from rubber

11. DIFFERENT AGRICULTURAL COMMODITIES

12. CEREAL GRAINS Farmers grows this as a: Food source for human Food source for animals Feedstock for fuels (in some cases) The most common grains commodities include the following: Wheat, Corn, Oats, Barley and Rough rice

13. Grain commodities often serve similar purposes For example, Corn, Oats and Barley all function as food sources for livestock Depending on price, Farmers will choose one grain over the other As a result, most grain commodities have a strong price relationship with one another Traders monitor the spread between grains prices to determine the relative values of one grain versus another

14. OILSEEDS These commodities resist easy classification since they serve m ultiple purposes Farmers grow them for the high oil content in their seeds and the meal that remains after oil is extracted Canola, Cotton, Palm oil, Soy beans In the case of cotton, the plant fibers have their own important market in the clothing and houseware industries Because the farmer used the meal from this crops in animal feed, oil seeds often have a strong price relationship with cereal grains

15. MEAT Meat Commodities include a live animals raise for meat, hide, organs, bones and hooves and cuts of meat produced during the butchering of animals; Feeder cattle Live cattle Lean hogs Pork bellies

16. DAIRY Dairy commodities include milk, butter, whey and cheese Markets for these commodities date back to the 19 th century when traders organized the Chicago Butter and Egg Board.

17. OTHER SOFT COMMODITIES Soft Commodities refer to commodities that are farmed rather than mined However, most commodity traders classify cereal grains, oilseeds, dairy and meat separately The remaining soft commodities all have developed and liquid global markets: Cocoa Coffee Frozen concentrated Orange juice (FCOJ) Sugar

18. MISCELLANEOUS AGRICULTURAL COMMODITY Some commodities have well-developed global markets, but don’t fit easily into the above categories: Lumber Rubber Wool

19. KEY GLOBAL TRENDS IMPACTING AGRICULTURE

20. POPULATION GROWTH AGRICULTURAL PRODUCTIVITY TECHNOLOGY AND BIG DATA DEMAND FOR MEAT IN CHINA GLOBAL WARMING

21. WHAT INFLUENCE AGRICULTURAL COMMODITIES PRICES ?

22. SUPPLY AND DEMAND SEASONAL PRICE CYCLE WEATHER EVENTS

23. These events have a big impact on commodities, especially when it comes to crops, such us wheat, corn, and soybeans. When its come to livestock, there can be a wide range of issues that may arise, which can impact the prices of these commodities. If an epidemic arise, this will affect the supply of livestock, can also negatively impact agricultural commodities prices. Beyond this, there are many tariffs which are attached to import and export of commodities, while trade wars can also come into play. Many government around the world apply tariffs to goods, including commodities, in order to protect their own producers. Agricultural goods are therefore traded with all of these macroeconomics issues in mind.

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