Commodity Prices

Item price Item price The item is defined as a substance that can be exchanged for other similar products such as food, grain, metal, etc. Usually it will be traded through future contracts. Or, more generally, items traded on a commodity exchange, including foreign currency, financial instruments, and indices. When people talk about goods, they can refer to these two types of finance.

Fluctuations in commodity prices, the globalization of the global economy, and the liberalization of commodity markets have caused serious changes and have a serious impact on the weaker economies of developing countries. Unstable commodity prices adversely affect economic growth, domestic financial resources and income distribution, which can lead to an increase in poverty over poverty alleviation. In many countries, especially in Africa, more than 90% of export income comes from products.

Product prices will affect the economies of several countries in the world. There are many factors that make commodity prices unstable. As we all know, goods can be classified as items that people demand. In economic theory, if this happens, the economy of the country will become unstable if there is a possibility that the demand will exceed the supply and cause shortage. In the case of goods, there are some techniques to guarantee the price of goods to guarantee a stable price. For example, exchange rate changes, world political situation, inflation, global production, industrial production etc.

The measure of the demand for goods related to the item price is the price of goods responding to the price of other products, ie the mutual price elasticity XED, which refers to the degree of decline or rise of the price of the item at a certain point in time Affects the situation B demand increases or decreases. The item XED> 0 indicates that the demand of the BA product is in the same direction as the change of the item price as another option, and XED <0 indicates that the demand of the products B and A changes the item price in the opposite direction . The conditions remain unchanged, the commodity demand of BA has nothing to do with the change in commodity price