There are three essential things that a person needs in life- food, clothes, and shelter. Out of these, we will be talking about food. Food is the main component that regulates the body. Also, it gives the energy to work hard for the whole day. The person responsible for providing us with this essential component is a farmer. Also, they cultivate crops and grains which helps them to gain some revenue and feed their families. These crops are agricultural commodities. Also, the term commodity refers to basic agricultural products that are either in their original form or have undergone primary processing.
Uses of agricultural commodities
Most of the agricultural commodities provide a source of food for people and animals all over the world. However, some agricultural products are used in industrial applications.
Building and furniture
These industries use lumber that is extracted from rubber trees while manufacturers in many sectors use latex that comes from rubber trees.
Wool that comes from sheep is used in the clothing industry to make winter clothes like sweaters, scarves, and socks.
A commodity that is used in food, industrial, as well as fuel production is corn that is cultivated in many parts of the world.
We use all these commodities on an everyday basis and life would not function the way it is now with the absence of any of these commodities.
Why are agricultural commodities important?
As we mentioned earlier, living beings depend on the agricultural industry one way or the other. Over 1.3 billion people, almost 20% of the population work in the farming industry. Also, some regions of the world like South-Asia, Sub Saharan Africa have more people in farming when compared to other industries.
However, the Global impact of the agricultural industry is enormous. In the year 2019, agriculture, food, and related industries contributed $1.109 trillion to the US gross domestic product (GDP) in a 5.2 percent share.
With the world population expected to climb high and with a population of 7.8 billion people currently, the food and agriculture industry will definitely have a huge demand and play a bigger role in the decades ahead.
Also, after understanding the uses and importance of agricultural commodities, let us move ahead to the next topic related to the different types of agricultural products.
What are the different agricultural commodities?
The agricultural commodities are classified into six categories. They include-
- Cereal grains
- Other soft commodities
- Miscellaneous agricultural commodities
Cereal is any grass grown for the consumable elements of its grain. It comprises the endosperm, germ, and bran. People grow it in large quantities and provide the most amount of energy when compared to other food items. Also, cereals are a rich source of vitamins, minerals, carbohydrates, fats, and protein. Each crop has its own season and can be cultivated during that period only. The various types of cereal grains consist of-
- Rye, etc.
All these commodities are a food source for humans, animals, and feedstock for fuel in some cases. Farmers choose the crops depending upon the prices and quantity. The crop that yearns the most amount of quantity and money is kept as the top priority keeping in mind the various weather conditions.
Oilseeds or rapeseeds are bright yellow flowers cultivated mainly for their rich oilseed that contains appreciable amounts of erucic acid. Moreover, it is the third-largest source of vegetable oil and the second-largest source of protein in the world. People use it for the production of animal feed, edible oil, and biodiesel. Farmers generally grow them for high oil content and meal that remains after the oil is extracted from the seeds. They consist of-
- Palm oil
Cotton has a great demand in the clothing as well as houseware industries. Also, it has many other uses. Oilseeds have a strong price relationship with cereal grains as the farmers use meals from these crops as animal feed.
Meat has also been a part of people’s diet for many years. However, the consumption of meat has now reduced as people have started adopting vegetarian diets or vegan diets. Still, it is a major agricultural commodity in many parts of the world.
Dairy has again contributed majorly to the agricultural commodities industry. It is the processing of milk, cheese, butter, whey, and more such products for human consumption. The people have yet again started to reduce their consumption of dairy. However, they have adopted a vegan diet that restricts the usage of dairy products.
Other soft commodities
Soft commodities refer to the products that people grow rather than mined which happens in the case of hard commodities. The soft commodities consist of products like-
- Frozen orange juice
Miscellaneous agricultural commodities
Other commodities that have a great demand in the global market but cannot fit into any of the above categories are included in the miscellaneous commodities category. They consist of the following products-
Also, these commodities are used in the housing and building industry as well as in the clothing industry.
Global trends that impact agricultural commodities
- Population growth
- Agricultural productivity
- Technology and big data
- Global warming
The bottom line
All of the above points determine whether an agricultural commodity will have more demand or less. It is very important to understand the various factors and categories that are listed down so that further export-import becomes easier. Therefore, if you are a beginner in the industry and have no knowledge at all, we would suggest you hire an import-export company that does the job for you.
At PL Global, which is an import-export industry, you will get all your services fulfilled in a single place without any problems or complications. The team of more than 1000 employees ensures that the work goes smoothly and efficiently. Apart from this, they have been working in this industry for more than 80 years. Also, they have a lot of experience as well.