Commodity exchange

Commodity exchange

Commodity exchange is designed to trade in food products, raw materials and energy, as well as other products of mass consumption. Traded commodity exchange can use a wide range of goods, and may specialize in certain types, for example, on oil, grain, or fur. Commodity exchanges are of great importance in international trade relations. With their help, is to establish a market price for the goods.

Today, commodity exchanges were only in some countries and their turnovers are low enough. Usually they are one of the ways wholesale trade of local importance, which is characterized by low concentrations of consumption, marketing and production. The largest commodity exchanges operating in Malaysia, India and Indonesia.

Commodity exchange is determined by the legislation as an organization having legal personality, which forms the wholesale market, regulating and organizing exchange trade, which is held in a public auction held by certain rules in a particular place.

Many operating commodity exchanges operate in a continuous auction, taking place throughout the day. At this time, sellers make offers, and buyers submit an application. The deal is when the interests of both sides coincide.

Money for these or other goods shall be paid at one time with their delivery. But, increasingly on commodity exchanges are transactions pending on the conditions of delivery when the goods are bought at the price established at the time of the transaction, but it comes after some time. It's - futures trading. In today's world, where market relations are developing with a rapid rate, commodity exchanges have not lost their significance, their institution was transformed into a market for rights to the product.