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A Commodity is any product or activity that is produced by human labor for the purposes of being sold in a commercial market. Commodities can be accumulated for a period of time (some are perishable while others can be stored for virtually centuries), exchanged as part of transactions or purchased on specific markets (such as futures market). Some commodities are fixed, implying that they cannot be transferred, except for the title. This includes land, mining, logging and fishing rights. In this context, the value of a fixed commodity is derived from the utility and the potential rate of extraction. Bulk commodities are commodities that can be transferred, which includes, for instance, grains, metals, livestock, oil, cotton, coffee, sugar and cocoa. Their value is derived from utility, supply, and demand, which is established through major commodity markets involving a constant price discovery mechanism.
A Commodity Chain (sometimes known as a "supply chain" or "value chain") is a network of production, trade, and service activities that cover all stages from the transformation of raw materials, through intermediate manufacturing stages, to the delivery of a finished good to a market.
Commodity chains are what link specific production systems in particular places to a global, highly interdependent economy.
A commodity chain is a common tool that geographers, economists, and other social scientists use to understand the journey of a particular resource, from when it is first extracted through processing and refining, to when it is sold and consumed as a finished product. Some commodity chains also study of the "afterlife" of a product by looking at where it goes (and how it might take new forms of value) as an after-market waste product. This tool is especially useful for tracing the connections between the places and people involved, and the impact that our demand for a particular commodity has on the environment.
Keep these definitions in mind as you work through all five chapters of the following multimedia presentation. Make sure that you watch the videos and scroll down to read all the text in each of the five chapters:
You are expected to know the material contained in both the text and the videos. The links within the reading that take you to external sources of additional information are not required (but you are encouraged to explore them; they are certainly very interesting!).
Click the image below to link to the multimedia presentation: (Click the CHAPTERS icon in the lower left corner of your screen to watch all the five chapters.)
As you work through the material, pay especially close attention to the geography of this commodity chain:
- Where does it travel?
- Why does it travel to these places?
- What people and technologies are involved at each stage?