Agricultural Commodities Trading

Roman Dawidowicz Agricultural commodities trading is the world’s biggest commodity trading type that occurs both on a local and international level.

Commodities like sugar, cotton, corn, wheat, soybean, livestock, coffee, oilseeds, cocoa, grains and so on are traded as exchanges.

These commodities, also called soft commodities, are planted above the ground. Hard commodities are found underneath the land. Roman Dawidowicz, a seasoned commodity trader, gave examples of hard commodities such as gold, coal, oil, petroleum.

Trading coffee is a good choice for fast trading according to Roman Dawidowicz because it sells fast and the price often changes. Roman Dawidowicz further stated that “With my years of experience as a commodity trader, sugar and corn have excellent liquidity because they go viral easily.” A trader doing commodity trade with corn, sugar, and coffee is assured of making a profit.

Commodities are interchangeable and sellable raw materials and finished products that are exchanged in large quantities.

Exchanging commodities is essential in improving the economy of any nation that engages in it. Traders can trade their varied commodities in a standard marketplace. They can exchange the products they have for other products with different traders in an organised manner.

Goods are characteristically consistent in characteristics. It means that they are very identical to products in a similar group. It is difficult to find dissimilarities of these products among different traders. For illustration, there is difficulty in seeing the distinction between rice from trader A and rice from trader B.

Products have four categories:

• Animals: Examples; cows, goats, sheep, poultry, fish.
• Energy: Examples, mineral oil extracted from the ground, petrol, coal.
• Farms produce: soy beans, rice, beans, grains, cotton, and many more.
• Metallic materials: Examples, copper, silver, golden metal.

Product trading can take place virtually (online) or physically (marketplace, trading place, trading posts) with strict laws and restrictions put in place. The legal exchange of commodities is called product buying and selling. Corporate institutions, unions or enterprises legally authorized to organize a place for trading are present. In some countries, many products trading are limited to exchanging specific products. Some barter-only in grains, some trade in oils, while others can specialize in livestock sales.

Bartering of products is done in two different ways. They are:

On the point trading:

This type of trade occurs in the market zone. A deal is made whether to pay in money or other products. There is a price set by the existing market rate. After the deal, the traders swap the commodities instantly. Release of products is made later or instantly depending on the agreement.

Prospects Contract Trading:

Buyers and sellers involved have the treaty to buy and sell the goods at a specified date with a fixed future rate. No goods are instantly exchanged on the spot. If the rate of a particular goods changes, there is a preset price for all traders involved to purchase and sell goods as stated in the contract. It is important to note that prospective agreement trading is most times nullified before the agreement expires. Hence, traders scarcely deliver the products agreed upon. This type of trading is used as a risk control method to speculate future prices.

Why products marketing is important

• To get information and entrance into the economy of developing countries.
• Know agricultural technologies that are resourceful for farming efficiently.
• To know weather conditions and any fluctuations that might occur.

Roman Dawidowicz concludes that, “the total comprehension of any necessary operations in the marketplace is important for an agriculturist to be successful.” This is true because agriculturists utilize products to buy and sell or manage the risk of price fluctuations.