There are many types of commodities that are traded, but which one can you find the most on the stock exchange? And which raw materials are the most popular? You can read it below, in our top 10 most traded commodities.
The first place is for petroleum. Oil is the most traded commodity in the world. The most well-known application of oil is of course petrol and diesel, but oil is also used in the production of plastics and many other types of materials, among other things.
Trading in oil is therefore very popular, but the price can fluctuate a lot. Because there is so much demand for oil, the price is very dependent on developments in the world. Crises, war, scarcity and barriers to trade all affect the price of oil to varying degrees. Nevertheless, petroleum is firmly in the first place of most traded commodities.
2. Natural gas
In second place is natural gas, a by-product of petroleum extraction. It is therefore not surprising that the price of natural gas is linked to the price of petroleum. The demand for natural gas is not always equally high, it has peaks and troughs. In many places, natural gas is therefore stored in tanks.
In the Netherlands, we mainly use natural gas for heating houses and for cooking, for example. Despite the decline in the use of natural gas in many countries, demand remains stable. This is mainly because the demand for this commodity is increasing in emerging countries.
Gold has been an important and sought-after commodity for centuries. In recent years, gold has been widely used in the production of electronic devices, but also still in jewelry. In addition, gold is often an investment resource, because this commodity retains its value, making it a safe investment.
The price of gold is determined by supply and demand, which can entail a risk. Much gold is mined in China and emerging countries, making other economies dependent on gold imports.
Coffee is widely traded as CFD, just like grain. In general, the price of coffee is quite stable, and will not make a big ‘swing’ anytime soon. This is because coffee is grown in various places in the world, and there is a lot of choice.
As coffee is increasingly consumed around the world, the growth of coffee has not yet reached a plateau. Coffee will be traded much more in the coming years.
In fifth place is sugar, the most used sweetener in the world. Sugar is an economically very important raw material. Sugar is quite difficult to produce and requires a lot of knowledge. That is why trading in sugar is not very easy. There are many conditions on the market that must be taken into account.
It is striking that the price of sugar is directly opposite the price of petroleum. This is because sugar is used to produce ethanol. If the oil price rises, the demand for ethanol increases, and thus indirectly also the demand for sugar.
Copper has been around for hundreds of years. In the last 50 years, copper has started to gain popularity due to its excellent conductivity. Copper is often converted to copper wire, which is used in almost everything.
Copper is widely traded, but also seen as a risky commodity. Because copper is used in many products, the price of this highly traded commodity depends on the economy. When production falls, the demand for copper falls proportionally. So it is important for many copper traders to keep an eye on the economy.
When most people think of soybeans, they think of the meat substitutes that can be found in the supermarket. But soybeans are one of the most traded commodities in the world. Soybeans are used in the production of natural soy sauce, soy milk, tofu and various vegetable products.
But soybeans are also used as manure and as animal feed for cows, among others. Because soybeans are becoming more and more popular, the trade in these beans is also growing steadily, and the market is expanding. Soybeans are widely produced in the United States, so price fluctuations are often linked to the dollar exchange rate.
Where silver used to be widely used as a raw material for ornaments, cutlery and art, it is now an indispensable part of electronic devices. Silver is an ideal connector for components in telephones, for example. But silver is also used to reduce fog at airports.
Silver is widely traded because it is seen as a ‘safe investment’. The market for silver is stable, and thanks to its application in manufacturing and various industries, the demand for silver continues to rise. Silver is also often found where copper is found, making production cheaper than gold.
Grain is used all over the world. It is indispensable as a raw material in our food, but is also used, for example, as a biofuel. Since you can’t just store a few tons of grain, CFDs are mainly traded.
Because grain has so many uses, this is a fairly stable raw material. In the Netherlands, grain is widely used for the production of animal feed. Grain traders make extensive use of reports and tools to provide information about grain production.
The top 10 opens with the well-known cotton. Cotton is, of course, most commonly used for clothing production. However, trading cotton is quite volatile. That is, the price can fluctuate a lot. This is because cotton production is highly dependent on factors such as the weather.
China produces the most cotton in the world, followed by the United States and India. together these countries produce about 60 million bales of cotton per year. It is interesting for many traders to trade cotton with CFDs.