What are soft commodities primarily composed of?

What are soft commodities primarily composed of?

• A. Raw materials mined from the earth
• B. Financial securities and assets
• C. Grown agricultural products
• D. Precious metals and minerals

Answer: (C)

Soft commodities are primarily composed of grown agricultural products, which include items such as corn, wheat, rice, soybeans, coffee, and sugar, among others. These products are cultivated on farms and are subject to the conditions of the agricultural sector, such as weather and seasonality. The classification of soft commodities distinguishes them from hard commodities, which typically encompass natural resources that are mined or extracted, such as metals and minerals. This distinction is crucial in understanding how different types of commodities operate in markets, their trading behaviors, and their overall economic significance. Soft commodities play a vital role in global trade, as they are fundamental to food supply chains and agricultural economies.

Soft commodities are primarily composed of grown agricultural products, which include items such as corn, wheat, rice, soybeans, coffee, and sugar, among others. These products are cultivated on farms and are subject to the conditions of the agricultural sector, such as weather and seasonality.

The classification of soft commodities distinguishes them from hard commodities, which typically encompass natural resources that are mined or extracted, such as metals and minerals. This distinction is crucial in understanding how different types of commodities operate in markets, their trading behaviors, and their overall economic significance. Soft commodities play a vital role in global trade, as they are fundamental to food supply chains and agricultural economies.