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Trading titans: 2024’s Top 10 commodities reshaping global markets

Top 10 traded commodities in the world, 2024

A commodity is the foundational raw material that is used for various finished products, necessitating processing before reaching consumer markets.

Coffee, for example, is a ubiquitous global commodity. Unlike picking leaves off a plant and instantly brewing a cup, coffee beans undergo a rigorous process—washing, drying, and packaging—before hitting shelves or exchanges.

The unique feature that sets apart various kinds of coffee is the way the beans are prepared. Coffee is washed, dried, and packaged in sacks before being sold on exchanges.

Read also: LCCI hails FG commodity board proposal, offers insights on best strategies

In other words, production standards must be met by all producers for the commodities exchange market to operate. Buyers, exchangers, and brokers don’t care where a barrel of crude oil comes from, as long as it meets the same standards regardless of whether it is produced by Chevron or ExxonMobil.

Every exchange-traded vehicle needs to adhere to certain guidelines. Food quality and the purity of metal alloys are regulated by laws.

These ten commodities are the most traded globally:

1. Brent Crude Oil

One of the most important crude oil types used as a benchmark for oil prices globally is Brent crude oil. Energy prices, stock markets, and transportation expenses are all directly impacted by these changes.

Oil prices can be significantly impacted by geopolitical and economic factors. For instance, when the COVID-19 epidemic struck, many economies throughout the world came to a near standstill, which caused demand to decline and oil prices to fall.

2. Crude oil: West Texas Intermediate (WTI)

A further essential oil benchmark is WTI crude oil. West Texas Intermediate, or WTI for short, is the benchmark for North American energy pricing and is predominantly produced in the United States. Its relationship to Brent crude frequently illustrates the dynamics of world supply and demand. The same factors that affect the price of Brent also affect this one. They are economic and geopolitical.

According to the World Bank, “energy prices are expected to fall by 5% in 2024, as subdued global growth reduces demand pressure, after dropping by an estimated 29% in 2023.” Furthermore, they say that “then projected to edge further down 0.7 percent in 2025” for energy prices.

3. Steel

Steel is the foundation of contemporary infrastructure; it is used in buildings, cars, ships, and many other things. Its demand may reflect economic expansion quite precisely. For instance, steel is utilized in the production of automobiles. A slowdown in the market for steel may be a sign that consumer demand for other goods, like automobiles, is also dropping. Steel is therefore a good proxy for industrial activity worldwide.

4. Copper

The technological world is powered by this extremely conductive metal. Copper finds application in a wide range of products, including consumer electronics, renewable energy infrastructure, and electrical wiring. Copper is utilized in so many items that demand for it is regarded as a good gauge of the state of the economy.

Read also: FMDQ Exchange says February secondary market turnover hits N40.31trn

5. Iron Ore

Iron ore is one of the most traded commodities, and iron is a major component of steel. Its processing and extraction power whole industries (consider iron mining), influencing global manufacturing, infrastructure, and building sectors.

6. Gold

Many people view gold, also referred to as the yellow metal, as a safe haven investment. According to a World Bank study report, “since the conflict began, metal prices have decreased by 1%.” Gold prices, which often rise in sync with geopolitical worries, have risen by 8%.

Gold’s worth extends beyond its application in electronics and jewellery. Due to its lengthy history as a wealth repository, investors constantly look to increase their exposure, particularly in tumultuous times. It is also a highly traded commodity due to its inverse correlation with US bond yields.

7. Silver

Silver is another valuable metal that boasts of its industrial uses in medical devices, electronics, and batteries. Its strong trading volume and demand are fueled by its industrial use cases and investment value. If you’re interested in trading silver, keep in mind that the two metal’s prices move in tandem quite a bit.

8. Coffee

Coffee is one of the commodities that is traded the most globally due to its huge demand. In July 2022, about 1,756,010 Coffee Futures Contracts were exchanged on the ICE and the retail coffee market is valued at $18 billion a year in the US alone.
The ICE is one of the most liquid markets for coffee trade. 37,500 pounds, or around 250 bags, is the contract size for coffee.

9. Soybeans

Soybeans are an important source of protein for both human consumption and animal feed. Furthermore, soy is utilized in a variety of non-food goods. Its derivatives, such as soymeal and soybean oil, broaden its market and turn it into a commodity that is traded extensively. With more than 60% of global soybean commerce going to China, this country is the biggest importer in the world. In the meantime, the US and Brazil are the top exporters of soybeans.

Read also: Rising cost of living: FG to establish commodity board

10. Cocoa

The annual production of cocoa beans is close to five million tons. Also in July 2022, 1,443,289 Cocoa Futures Contracts were exchanged on the ICE, as the ICE is one of the most liquid markets for trading cocoa. It is important to note as well that ten metric tons is the contract size for Cocoa.