What Are Commodities and What Are They?

To the commodities They are basic products, often raw materials, traded on a large scale in financial and physical markets. They are essential to the global economy, playing a key role in various industries and sectors. In this way, we will explore in detail the concept of commodities, the different types available and their importance in world markets.

Agribusiness products stand out among the commodities Brazilians due to the diversity of natural resources in the country. Around 65% of Brazilian exports are commodities. That said, get to know the 7 main commodities Brazilians:

1. Soy;
2. Coffee;
3. Petroleum;
4. Aluminum;
5. Orange juice;
6. Iron ore;
7. Boi Gordo (meat dish).

In 2023, agribusiness and the mineral extractive industry continued to be the pillars of Brazilian exports, with the soybean complex, crude petroleum oils, iron ore, meat complex, cellulose, sugar and coffee accounting for US$ 165.2 billion, the equivalent to 48.7% of the total exported by the country.

The Commodity Concept

To the commodities They are tangible goods, mass-produced and sold in large quantities. Therefore, they can be categorized into different types, including:

1. Agricultural Commodities

To the agricultural commodities are cultivated products. That is, grains (soy, wheat, corn, rice), coffee, cocoa, sugar, cotton, as well as other agricultural products. In other words, these items are essential for human and animal nutrition, as well as for the biofuels industry.

2. Energy Commodities

The resources used to produce energy are energy commodities. This includes crude oil, natural gas, coal and electricity. Therefore, these commodities play a vital role in the global economy by affecting the prices of many other goods and services.

3. Metallic Commodities

To the metal commodities are metals extracted from the Earth's crust. Examples include gold, silver, platinum, copper, iron and aluminum. Therefore, these metals are used in a variety of industries, from electronics manufacturing to construction.

The importance

Currently, the commodities play a crucial role in the world economy for several reasons:

• Supply of Raw Materials: Many industries depend on this as a raw material for the production of finished goods. For example, the automobile industry requires metals such as steel and aluminum to manufacture cars.
• Pricing of Final Products: Prices can directly affect the cost of many final products. For example, an increase in the price of oil could result in higher gasoline and transportation prices.
• Investment Diversification: They offer investors a way to diversify their portfolios. Therefore, they have a low correlation with other assets, such as stocks and bonds, which can help reduce the risk of an investment portfolio.

Commodity Trading

They can be traded on various markets, including stock exchanges and over-the-counter markets. Therefore, there are several ways to trade commodities, including futures contracts, options, ETFs (Exchange-Traded Funds) and CFDs (Contracts for Difference).

• Futures Contracts: Futures contracts are agreements to buy or sell a specified quantity of a commodity at a specified price on a future date. In other words, they are used by producers and consumers to protect against price fluctuations.
• options: Options are contracts that give the holder the right, but not the obligation, to buy or sell a commodity at a specific price on a future date. They offer flexibility to investors. As well, they can be used to speculate on price movements.
• ETFs and CFDs: ETFs and CFDs are financial instruments that allow investors to trade commodities without having to own the underlying asset. In this way, they offer a convenient way to access the markets with leverage.

Investment opportunities

To the commodities play a vital role in the global economy, i.e. providing essential raw materials to various industries and sectors. Therefore, they can be traded on various financial and physical markets, offering investment opportunities and protection against price fluctuations.

Luxury and high standard real estate consultancy in Florianópolis

Here at Buzz Luxury Home, by using commodities as a form of payment for the purchase of properties, we facilitate your negotiation and guarantee the security of the entire process.

We offer a high standard real estate space exclusive to you. With more than 20 years of experience in the market. Therefore, we are ready to advise you in your search for the ideal property, whether for investment or housing in any region of Florianópolis Island.

Furthermore, we are located in one of the most beautiful and sought-after places in the world: Jurerê Internacional, at Rua Alameda César Nascimento – 87, Loja 2, in Infinity Blue. Therefore, we can offer a wide variety of options that meet your life goals and current situation.

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