Okay i understand the commodities were traded primarily as an interaction between a producer and a supplier. But these days, it seems hard to believe that only Old McDonald is involved in corn, wheat, soy, and all those futures. So how do other individuals, primarily financial institutues, profit (or lose) from the commodity markets when all they’re trading is something not very liquidable?
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1 Response
The commodity market is still particularly important for agrarian economies where large number of population rely on crop production for their livelihood. unfortunately, markets in these countries are undeveloped. with so many disadvantages:
- falling agricultural commodity prices
- increased cost of production
On precious metal commodity markets (eg. gold, diamond, etc), commodity markets are relatively active and well functioning
Posted on January 27th, 2010 at 8:40 pm
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