Commodity (noun): A basic good or raw material that can be bought, sold, or exchanged, typically in bulk, and is interchangeable with other goods of the same type.
Commodity (noun): A useful or valuable thing, often referring to items that are traded or have economic value, such as agricultural products, metals, or energy resources.
History and Origin
The word “commodity” comes from the Latin word commoditas, meaning “convenience,” “usefulness,” or “advantage.” It passed into Old French as commodité in the 14th century and eventually entered Middle English. The term initially referred to usefulness or advantage but evolved to describe economic goods in the 16th century.
Detailed Explanation
Economic goods: In economics, commodities are raw materials or primary agricultural products that can be traded. They are standardized and interchangeable, meaning one unit is essentially equivalent to another of the same type. Examples include oil, wheat, gold, and coffee.
Market significance: Commodities are typically bought and sold in large quantities, often through futures markets. The price of a commodity is usually determined by supply and demand in global markets.
Types of commodities: There are two primary categories of commodities:
Hard commodities: These include natural resources such as gold, oil, and metals.
Soft commodities: These include agricultural products like wheat, coffee, and livestock.
Value and use: Beyond raw materials, the term commodity can also refer to anything valuable or useful. For instance, in a business context, customer service or skilled labor can be seen as a “commodity” when it’s widely available and interchangeable.
Example Sentences
The price of oil is a key indicator in the global commodity market.
The government regulates the import and export of certain commodities like wheat and corn.
Investors often buy commodities like gold as a hedge against inflation.
The value of coffee as a commodity has fluctuated over the years due to changes in supply.
The country exports several commodities, including coal and natural gas.
Commodities like sugar and cocoa are vital to the economy of many tropical countries.
The company deals in agricultural commodities, including grains and livestock.
Commodities such as water and clean air are becoming increasingly valuable in areas facing shortages.
With increasing demand, rare earth minerals have become a highly sought-after commodity in technology.
Synonyms with Short Explanation
Product: A general term for goods that are produced for sale, similar to commodities in a commercial sense.
Goods: Items that are traded or sold, including commodities, though it can refer to a broader range of products.
Resource: A natural or man-made material used to produce goods or services, closely related to commodities like oil, coal, or timber.
Asset: A resource with economic value that can be traded or used to generate wealth, similar to commodities in financial markets.
Material: Raw substances used in the production of goods, often interchangeable with commodities, especially in manufacturing.
Related Words with Short Explanation
Trade: The action of buying and selling goods, including commodities, often on a global scale.
Market: The economic system or environment in which commodities are bought and sold.
Futures: A financial contract to buy or sell a commodity at a predetermined price in the future, often used in commodity trading.
Supply: The availability of a commodity, which directly influences its price in the market.
Demand: The desire and ability of consumers to purchase a commodity, which impacts its market value.
More Matches with Short Explanation
Stock: A supply or inventory of commodities or goods that can be traded.
Exchange: A marketplace where commodities are bought and sold, such as the Chicago Mercantile Exchange.
Inventory: A stock of goods or materials, including commodities, held for sale or use.
Hedge: A financial strategy used to reduce risk in commodity investments, especially in volatile markets.
Price fluctuation: The rise and fall in the price of commodities due to changes in supply and demand or other market factors.
Antonyms
Luxury: High-end, non-essential items that are typically not interchangeable, unlike commodities.
Specialty: Products or goods that are unique or customized, in contrast to the standardization of commodities.
Non-essential: Goods or services that are not necessary or fundamental, unlike basic commodities.
Unique product: An item that is distinct and not interchangeable with others, unlike commodities which are identical in nature.
Customized product: A tailored or personalized product, opposite to the interchangeable nature of a commodity.