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Dictionary Definition

commodity n : articles of commerce [syn: trade goods, goods]

User Contributed Dictionary

English

Etymology

commoditee < commoditee, from commoditat, commoditas.

Alternative spellings

commoditie (archaic)

Noun

Anything movable (a good) that is bought and sold.
- 1995, James G. Carrier, Gifts and Commodities: Exchange and Western Capitalism Since 1700, p.122http://books.google.com/books?id=7BwbwuPyLccC&pg=PA122&dq=commodities+shopping&sig=dozEQAUipFYsEyUTkKpSqKbSCqk
  
  If a key part of shopping is the conversion of anonymous commodities into possessions, shopping is a cultural as much as an economic activity.
- 2001, Rachel Pain, Introducing Social Geographies, p. 26 http://books.google.com/books?id=FVb2cfVpST8C&pg=PA26&dq=commodities+shopping&sig=OhV4OSNFSU9DE2-UdUBQsFosh5Y
  
  In human geography "commodities" usually refers to goods and services which are bought and sold. The simplest commodities are those produced by the production system just before they are sold.
- 2005, William Leiss, Botterill, Jacki, Social Communication in Advertising: Consumption in the Mediated Marketplace, p.307 http://books.google.com/books?id=R_ELAoKRDb4C&pg=PA307&dq=commodities+shopping&sig=AyH9Brabe3RC16bitD6AOsfSfPw
  - Referring to the work of Bourdieu, Zukin (2004,38) notes that shopping is much more than the purchase of commodities
Something useful or valuable.

''And Slade said: "It really makes me sad that football club chairmen and boards seem to have lost that most precious commodity - patience. "Sam's sacking at Newcastle had, I suppose, been on the cards for a while, but it is really ridiculous to fire a manager after such a short time. Somerset County Gazette on Jan. 14th, 2008.
In the context of "economics": Raw materials, agricultural products and other primary products as objects of large scale trading in specialized exchanges.

The price of crude oil is determined in continuous trading between professional players in World's many commodities exchanges.
In the context of "marketing": Undifferentiated goods characterized by a low profit margin, as distinguished from branded products.

Although they were once in the forefront of consumer electronics, the calculators have become a mere commodity.''

Translations

anything movable traded

Finnish: hyödyke
French: produit, bien
Polish: towar
Spanish: bien

something useful

Finnish: avu, hyödyke

primary product as object of trade

Finnish: raaka-aine, hyödyke

undifferentiated good

Finnish: massahyödyke

Extensive Definition

A commodity is anything for which there is supply, but which is demanded without qualitative differentiation across a foreign market.

Characteristic of commodities is that their prices are determined as a function of their market as a whole. Well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, ethanol, sugar, coffee beans, soybeans, aluminum, rice, wheat, gold and silver.

Commoditization occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the intellectual capital necessary to acquire or produce it efficiently. As such, goods that formerly carried premium margins for market participants have become commodities, such as generic pharmaceuticals and silicon chips. Linguistically, the word commodity came into use in English in the 15th century, derived from the French word "commodité", similar in meaning to "convenience" in terms of quality of services. The Latin root meaning is commoditas, referring variously to the appropriate measure of something; a fitting state, time or condition; a good quality; efficaciousness or propriety; and advantage, or benefit. The German equivalent is die Ware, i.e. wares or goods offered for sale. The French equivalent is "produit de base" or "matière première" like energy, goods, or industrial raw materials.

A commodity's value changes over time.

Commodity trade

In the original and simplified sense, commodities were things of value, of uniform quality, that were produced in large quantities by many different producers; the items from each different producer are considered equivalent. It is the contract and this underlying standard that define the commodity, not any quality inherent in the product.

Commodities exchanges include:

Markets for trading commodities can be very efficient, particularly if the division into pools matches demand segments. These markets will quickly respond to changes in supply and demand to find an equilibrium price and quantity. In addition, investors can gain passive exposure to the commodity markets through a commodity price index.

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