A commodity is a common good, typically which people will buy regardless of who provides it. Few, if any, people demand a certain kind/brand of wheat or oil--they will accept this good from any producer, as it looks and functions exactly the same. There are different kinds of commodities:

  • Soft commodity: Typically a good that is grown. Examples include wheat, coffee, sugar, corn, tea, soybeans, and rice.

  • Hard commodity: Typically something extracted from the earth. Examples include gold, silver, iron, aluminum, and platinum.

  • Energy commodities: Typically more difficult to store than other kinds of commodities. Examples include electricity, oil, gas, and coal.


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AuthorIsabel Munson
CategoriesCommodities