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Commodity Trading Online

Commodity Trading Online

22.03.2021

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A commodity exchange is a permanent wholesale market of pure competition, where, according to certain rules, sales and purchases for qualitatively homogeneous and easily interchangeable goods are made.

International trade is a system of international commodity-money relations, formed from the foreign trade of all countries of the world.

International trade arose during the emergence of the world market in the 16th and 18th centuries. Its development is one of the important factors in the development of the world economy in the modern era.

The term international trade was first used in the 12th century by the Italian economist Antonio Margaretta, the author of the economic treatise The Power of the Popular Masses in Northern Italy.

International trade is a form of communication between producers of different countries, arising on the basis of the international division of labor, and expresses their mutual economic dependence. The following definition is often given in the literature: International trade is the process of buying and selling carried out between buyers, sellers, and intermediaries in different countries.

International trade includes the export and import of goods, the ratio between which is called the trade balance. The UN statistical reference books provide data on the volume and dynamics of world trade as the sum of the value of exports of all countries of the world.

The term “foreign trade” refers to the trade of any country with other countries, consisting of paid import (import) and paid export (export) of goods.

International trade is called the paid aggregate trade between all countries of the world. However, the concept of “international trade” is also used in a narrower sense: for example, the total turnover of industrialized countries, the total turnover of developing countries, the total turnover of countries of a continent, region, for example, countries of Eastern Europe, etc.

National production differences are determined by the different orientations of the factors of production – labor, land, capital, as well as different internal needs for certain goods. The effect of foreign trade on the dynamics of growth of national income, consumption, and investment activity is characterized for each country by quite definite quantitative dependencies.

Also, world trade is divided into two branches, which can be called geographic and commodity structures. It should be noted that, like any other organizational direction, these structures are inherent in constant evolution.

Story

Commodity exchanges appeared much earlier than stock exchanges. The first commodity exchange was founded in Bruges in 1409. The first organized commodity exchange was established in Antwerp around 1460. In 1531, the exchange building was erected, and before that transactions were carried out in a special area. After the defeat of Antwerp by the Spaniards in 1576, the exchange was moved to Amsterdam. Later, commodity exchanges appeared in other European cities (London, Lyon, Toulouse, etc.).

In the United States of America, the first exchanges appeared at the beginning of the 19th century. With the development of capitalism, exchanges also developed rapidly. So, in the USA alone, there were about 500 of them at that time.

With the development of the market economy, the improvement of transport, the creation of modern means of communication, the number of commodity exchanges decreased. At the same time, there was a process of reducing the number of types of goods sold and bought on exchanges. If during the heyday of exchanges, more than 200 types of goods were traded on them, then at present there are about 100.

In Russia, the first exchange was created in 1703 on the basis of the decree of Peter I, who got acquainted with the work of the exchange while in Holland. During the socialist period with a planned, command-administrative economy, there were no exchanges in the USSR and Russia, except for the short-term period of the NEP.

With the transition to the market, exchanges began to appear in Russia, the number of which grew very quickly. In the short term, the number of registered exchanges in Russia exceeded the total number of active exchanges in the world. However, not all of them actually worked.

Since January 1, 2014, Russian legislation does not provide for the division of exchanges into stock, currency, and commodity exchanges; to designate all of the above types, the term “exchange” is used (clause 6 of article 29 of the Federal Law of November 21, 2011, N 325-FZ (as amended on December 21, 2013) “On organized trading”), and their activities are regulated by the Federal Law “On organized auction “and other regulations.

Exchange commodities

Currently, about 100 so-called exchange commodities are traded on commodity exchanges in the world. They account for about 20% of international trade. These products can be conventionally grouped into the following groups:

  • energy raw materials: oil, diesel fuel, gasoline, fuel oil, propane;
  • non-ferrous and precious metals: copper, aluminum, lead, zinc, tin, nickel, gold, silver, platinum, etc.:
  • cereals: wheat, corn, oats, rye, barley, rice;
  • oilseeds and products of their processing: flax and cottonseeds, soybeans, beans, soybean oil, soybean meal;
  • live animals and meat: cattle live pigs, bacon;
  • food products: raw sugar, refined sugar, coffee, cocoa beans, potatoes, vegetable oils, spices, eggs, orange juice concentrate, peanuts;
  • textile raw materials: cotton, jute, natural and artificial silk, washed wool, etc.
  • industrial raw materials: rubber, lumber, plywood.

Benefits of participating in international trade

  • the intensification of the reproduction process in national economies is a consequence of increased specialization, creation of opportunities for the emergence and development of mass production, an increase in the degree of equipment utilization, an increase in the efficiency of the introduction of new technologies;
  • an increase in export supplies entails an increase in employment;
  • international competition makes it necessary to improve enterprises;
  • export earnings serve as a source of capital accumulation for industrial development.

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