Commodity. The OED defines it as “a raw material or primary agricultural product that can be bought and sold, such as copper or coffee”. And put simply, commodities make the world go around. They’re the foundations around which global economies have prospered and built themselves over hundreds, if not thousands of years. As an oil investment company, we’re particularly interested in the commodity of crude oil. Still, we thought it would be interesting to take a look at some of the world’s other most common commodities.
Crude Oil (Both WTI & Brent)
Now, before you accuse us of being biased, crude oil is the most traded commodity, globally – that’s just fact. It obviously varies, but as an average, over 100 million barrels of crude oil are traded every single day. Oil has been traded religiously for over a century, with entire national economies influenced by how the oil markets move. Having such a reliance on one commodity isn’t without its flaws, but it’s led to sustained global economic growth unlike any other period of history.
In some ways, it’s rather nice that the humble soybean appears higher on this list than other shinier entrants! But the fact that this basic food product ranks so highly amongst traded commodities shows how important it is to global economics. Indeed, having been cultivated for thousands of years, soy is used in everything from food to oil, or candles to ink. Indeed, some estimates suggest that by the mid-2020s the global soybean market will have grown to a staggering $215 billion.
Just like soybeans, corn is one of the most traded raw products worldwide. This is largely due to just how commonplace it is as a food item. However, its versatility extends beyond simply food items, with corn increasingly being used in biofuels, plastics and livestock feed. Like the soybean market just mentioned, the global corn market is also set to skyrocket in value over the next few years; market analysts estimate a global value of almost $200 billion by 2026.
When people think of something ‘valuable’, their minds almost always instantly jump to stacked gold bars and bullion. From our early years (for many of us, as early as our first hearing of the Nativity story) we have it impressed upon us just how valuable this precious metal is. That sentiment still stands true today, and the global gold market at the end of 2019 was worth an astronomical $3.7 trillion.
Why exactly is gold so valuable? Well, there are several reasons. Firstly, in terms of abundance, it strikes a balance between being common enough to produce items from, but rare enough so that that’s not necessarily the norm. It’s also a highly inert and durable material and it’s also something we, as humans, just ascribed an intrinsic value to and then stuck with it ever since!
It’s hard to overstate copper’s importance in modern-day society. The reason? Primarily its conducting properties, both electrical and thermal. If you can think of a smart piece of gadgetry, whether it be your phone, your laptop or anything else – it will have some quantity of copper within it. There’s a reason, after all, that copper is so widely targeted by criminals and thieves; they know just how high a price it fetches.
If you’re anything like me, you can’t function in the morning until you’ve had a coffee or three. Enough people in the world must agree, it seems, because by looking at 2019 and 2020 combined, it was estimated that global coffee production sat at an ultra-caffeinated 168.84 million bags of beans. The caffeine isn’t the only thing that’ll perk you up, however, when you learn that by 2026 it’s thought the global coffee bean market is set to reach a revenue worth of $155 billion by 2026. I’ll have some shares to go please…
Contact TriStone Holdings Ltd
Without commodities, the world would be a very different place, that’s for sure! So, if you’d like to find out more about our work as an oil investment company, then get in touch! Contact TriStone Holdings Ltd today on 0800 055 7079 or by emailing us at [email protected]