COMMODITY Meaning and
Definition
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A commodity refers to a raw material or primary agricultural product that can be bought and sold in large quantities on commodity markets. It is a physical or tangible item that is considered interchangeable with other products of the same type. Commodities are usually unprocessed or only minimally processed goods, such as grains, metals, energy resources, and livestock.
Commodities are traded based on their quality and quantity, with standardized contracts specifying the terms of their delivery, including the price, grade, and quantity. These contracts allow for easy buying, selling, and transport of commodities, promoting liquidity and efficiency in market transactions.
The value of commodities is primarily determined by supply and demand dynamics, as well as external factors such as weather conditions, geopolitical situations, and economic trends. Due to their fungibility and wide trading, commodities often have fluctuating prices that can be influenced by various factors, making them attractive for investors seeking to diversify their portfolios.
Moreover, commodities are crucial for both industrial and consumer purposes. They serve as essential inputs for various manufacturing processes and are utilized in the production of goods and services across multiple sectors. Additionally, some commodities, such as gold and oil, have gained status as stores of value and are considered important for hedging against inflation or economic uncertainty.
Overall, commodities form a significant component of global trade and play a vital role in the functioning of modern economies.
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Anything that is useful; any object of commerce; anything that can be bought or sold, animals excepted; goods; wares; merchandise.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
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Etymology of COMMODITY
The word "commodity" traces its origins back to the Latin word "commoditas", which means "benefit, advantage, convenience" or "favorable opportunity". In Latin, "commoditas" is derived from the adjective "commodus", meaning "convenient, suitable". The word later entered Old French as "commodité" and eventually made its way into English as "commodity" in the 15th century, retaining its general connotations of something advantageous or convenient. Over time, it acquired specific meanings related to trade and goods, referring to items that are bought and sold, such as raw materials, products, or resources.
Similar spelling words for COMMODITY
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