content

Global Commodity Trade

One would assume that supply and demand is the simple guiding principal for global commodity trade. But the picture is much more complicated: investments in exploration, mining and transport infrastructure require a long term planning cycle and huge financial resources. Such a long term perspective is superimposed by short term price fluctuations in global commodity prices. Commodity exchanges are the places where short term prices are fixed. Such exchanges might appear like a casino, but they play an important role in the long term stability of raw material supply.

more...