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Commodity Prices Agricultural Products: The Vital Products And Their Cost

Agriculture is the activity by which the whole of the world gets food. For a developing economy, agriculture becomes more important from each and every aspect even from the trading and business viewpoint too. Commodity prices and agricultural products are the most crucial things to consider in trading. Read further to learn more about the concept in detail.

What Are Agricultural Products?

All those products that a farmer produces are known as the agricultural products. These products are the basic food items or the staple items that an individual needs in his daily life. 

What Are Commodity Prices?

In simple terms, commodity prices are the costs that are used in the commodity market for the trading of these agricultural products. The term commodity prices should not be confused with the price that is available for the consumers or the price at which consumers buy the products from the market. 

These prices are only used in trading in the commodity or agricultural market. 

A Basic Introduction To Commodity Prices Agricultural Products

In a simple way agricultural products or goods are the food requirements of all the humans and animals on earth. The list of agriculture products includes livestock, dairy products, crops, and grains. Some agricultural products also don’t serve as a food commodity but find a great application in the manufacturing industry.

For example, Most of the furniture manufacturing companies use wood from trees while tyre manufacturing industries use latex of the trees. Wool from sheep is a perfect choice for clothing while lanolin finds its application in skin and hair care products. Some products like corn also have dual applications as food and as a critical ingredient in fuel production industries. 

Let us discuss the importance of commodity prices and agricultural products.

What Is The Importance Of Agricultural Products?

Most of the people might consider the commodity prices of agricultural products not related to their field and don’t develop any interest in understanding its significance to the real world. Every human on this planet depends on variant types of agricultural products, and hence we cannot survive without such essential commodities.

We eat fruits and vegetables and wear clothes made using wool to beat the winter. All of us drive cars that use rubber tyres and make our home furniture from expensive wood. We can describe agricultural products as a basic need for human survival on the earth.

You may not realize, but each one of us is dependent on agricultural products and they play a big role in our everyday life. Take a look at some of the points of importance of the agricultural products:

1. Economical Importance

The agricultural products are a direct source of income for the government. In developing countries like India, it is the major source of income for the government. In India, the large percentage of the income is generated from the agricultural sector only. 

2. Raw Material

Many of the large industries get their raw material from agriculture only. For example, for making sugar, various sugar industries need sugarcane as it is the main ingredient. They can only get the sugarcane from the agricultural sector. Thus, we can say that most of the large companies fetch raw materials from agriculture only. 

3. Food Security

Agriculture is a sector that provides food to the nation and to its people. No one on this earth can live without food for a long time. We all need food. It is agriculture only that fulfils our basic needs. In case, when there are protests in the country in the context of farming or agriculture, most of the people become restless.

Thus, in one way or another, we all are dependent on agriculture. 

4. Means Of Living

For most of the people, agriculture is the source of living. They are the ones that are actually employed in this sector. This sector has also improved the living standards of many people. Even in India, it is the source of living for most of the people. Much of the rural population is engaged in this sector. 

Therefore, from the above mentioned points we can say that agriculture is the most important sector in any economy. Knowingly or not knowingly each and every person is dependent on this sector. 

The Economic Importance Of Commodity Prices Agricultural Products

In 2020 more than 1.03 billion people which is 20 percent of the world’s total population work in agriculture. Some regions of the world like south-east Asia and southern Africa the rate of farmers is higher than any other industry.

One thing about which we are sure is the global impact of agricultural products is enormous. A recent survey in the US states that the commodity prices of agricultural products were a three-trillion dollar industry a decade ago. Therefore one can expect an exponential rise of the agricultural commodities in the current market.  

It is difficult for consumers and traders to run their business without agricultural products providing them with a paramount role in human advancement and evolution. Therefore commodity prices and agricultural products are really important.  

Let us discuss some of the common agricultural commodities available in the global market. 

Different Types Of Agricultural Commodities

Cereal Grains

Cereal grains include rice, maize, ragi, wheat, and oats. They are a useful supplement for humans and animals and also play a significant role in the fuel industry. They are one of the critical agricultural commodities grains hold a strong position in the market.

Meat

We can divide the meat into two categories (a) and (b) where meat (a) includes organs, bones and skin on the other hand meat (b) includes the flesh of animals for human and animal consumption.

Dairy Products

Dairy products contain a wide variety of subcategories, and some of the major dairy products include cheese, butter, ice-cream, curd, milk, etc., which is one of the most demanding agricultural commodities.

The Bottom Line

Agriculture is more than just an occupation. It is simply serving mankind. Talking about trading, the commodity market is the next most important market that is really profitable. All you need to know is some of the basic market knowledge. For more information, PL Global Impex Pte Ltd will guide you.

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