To run a successful industrial or agricultural business, uninterrupted supply of commodities – such as raw materials and/or energy source – is a must and that too with stable pricing and no damage, pilferage, or theft.
Supply of commodities: Use or consumption of these commodities, ordinarily, takes place in industries, businesses, or locations far from the source. The procurement, transportation, storage, and distribution of these commodities require experience and expertise. High-value or price-volatile commodities mean high risk and therefore the need for security in pricing and logistics (transport, transit, and storage). Within Australia and overseas, commodity houses assist businesses and individual investors in sourcing and supplying these commodities in bulk.
Types of Commodities: Certain commodities can be classified as soft commodities. Agricultural produce such as coffee, wheat, sugar, corn etc. and livestock are grouped under soft commodities.
Other types of commodity include oil, gold, silver, iron, copper etc. Weather, seasonal changes, economic and political changes, and many other factors influence the demand and supply and therefore the prices and the balance sheet of commodity trading houses.
Let’s take a look at a few of these commodities and its impact on us.
Oil: This commodity has hugely influenced the way man has progressed more than most. Oil and Petroleum produces fuel that fulfils most of our energy and transportation requirement. Some might be surprised to know that plastics and other synthetic materials (from car tyres to medicines and cosmetics), paraffin wax, and other innumerable day-to-day merchandises are derived from chemical feedstocks refined from crude oil.
Gold: This precious metal that has fascinated humans from biblical times has many additional uses other than being the favourite of jewellers. It has a sufficient market for buying and selling, can hold its value and is not simply a paper asset. Gold is a component in many dental alloys and electronic devices. It is an element found in all major beauty aids.
Silver: Due to its malleability and ductility, silver finds innumerable industrial applications in medical instruments, batteries, mirrors, dental alloys etc., in addition to jewellery, silverware, and bullion trading.
Platinum group metals: This group of six metals have wide range of industrial use as catalytic converters in vehicles, fuel cells, jewellery etc.
Commodity traders regularly trade more than 1 commodity at a time.
Outsourcing your procurement of these commodities to expert commodity houses will help you in establishing a stable supply chain while saving cost and time. Utilise these in your core business to enhance productivity.