Commodity Exchange

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MEANING OF COMMODITY EXCHANGE

Commodity exchange is a technical term that explains international trade in terms of specifically visible products. Commodity exchange can be described as the buying and selling of visible items or products on international trade or across a national boundary. Simply, commodity exchange means the exportation and importation of visible items or products on international trade.

FEATURES OF COMMODITY EXCHANGE

The goods or products involved must have economic value.
Such products can be standardised either by their quality or by their economic grade in value.
Such products must be movable or transported from one place to another using the best and the most economic way of transportation.
Commodity exchange must be tradable, i.e ., it could be bought and sold either locally or internationally.
The seller of such commodities must be enjoying a comparative advantage in the production of such products against the buyer. Simply put, the seller must have an element of monopoly in the production of such products or commodities.
Such products or commodities must not be restricted from being made free for selling or buying or restricted by either the law or the custom of a place from being tradable in any place.