Soft Commodities – What are they?
Most CFD traders in the United Kingdom was for the products more difficult metals and oil issues, but many CFDs are available in the important area of 'softs'. This sector generally refers to products that are grown instead of mined, and this brief paper describes the context and factors affecting supply and demand.
The main "apps" are as follows:
Sugar
It is a form of carbohydrates, the most commonly used version is white crystal, or sucrose, used in flavoring. Sugar extraction and refining of cane sugar, beet sugar or sugar palm.
Most sugar cane is grown in hot countries like Brazil, India, (parts of) China, Australia, Fiji and Mexico. It should be noted that developing countries produced more sugar than developed countries. Beet sugar tends to grow in regions with colder climates such as North West and Eastern Europe, Northern Japan and parts of the United States.
In the northern hemisphere, the beet growing season ends with the beginning of the harvest September, and harvesting and treatment usually continues until March. The availability of capacity of the treatment plant, and time, have a major influence on the duration of harvesting and processing. It is possible to hold harvested beet until processed, but the freezing of beet damage generally can not be processed.
Much of the impetus behind the recent bull market has come from the effects of increased drought in the Brazilian market of the cane. As with all goods grown, however, the area planted with sugar cane grown at the expense of other crops such as coffee and oranges, a trend that should continue. The use of other more was for ethanol, but it is still not widely used outside of Brazil.
Cocoa
This is dried and partially fermented seeds fat cocoa. Hence the chocolate, and it can be powder in the cocoa powder. Cocoa butter also comes from the dark, bitter cocoa.
Application for the cocoa market is generally stable, but supply is often affected by political considerations, given the many areas unstable where it is extracted, especially in West Africa.
Orange Juice
The main factors affecting crop Orange is the prevalence of frosty nights, so production must be in tropical and warm temperate zones. Major exporters fresh organic citrus in Europe are Italy, Spain and Greece, and elsewhere, Argentina, the United States, Brazil, Israel, Costa Rica, Mexico and Cuba are the main exporters.
The main market organic citrus juice is orange juice, and there was an increase the "not from concentrate" OJ frozen rather than canned OJ recent years.
The main power are determinants of order climate. The end of winter freezing occurs, the less damage there as early and mid-season varieties are largely taken on trees and example in Spain, Valencia oranges are mature enough that much can be saved if treated immediately. Cooler gel, but not the temperature may be beneficial for the culture because it promotes good color.
Timber
The wood is wood that has been cut into boards or other forms in order to woodworking or construction, and it comes in raw form or finished. Rough lumber is the raw material for manufacturing furniture and other objects that require cutting and additional formatting. Finished wood is supplied in standard sizes, mainly for industry construction, and is mainly one of the few species bearing needles, such as pine, hemlock, fir or spruce.
The main market is of dimension lumber is a term used in the United States for wood that is finished or planed and cut to standardized width and depth spcified inches. In Europe, the size is slightly different.
Although wood is often a product of the local market, it goes without saying that the request is strongly linked to the health of the construction industry worldwide.
Cotton
This is the fiber that grows around the seeds of the cotton plant, which leads to a textile yarn that is soft and very breathable. The major producers of cotton in China, India, U.S., Pakistan, Brazil, Uzbekistan and Turkey.
The big question for investors in the long-term bull market in cotton is just how China and Far Eastern producers may actually become less self-sufficient, and reduce export demand Historical United States, where the market has always been based.
strong price increases have now begun to influence the plantations decisions and encourage farmers to expand even more in the area sown to cotton in these countries. Predictions of the International Advisory Committee cotton plantations in the world will increase by about 3% in 2006-07 with a lot of expansion taking place in mainland China and India.
Due to the increased use of improved seed varieties that are resistant to disease, more than likely as above yields resources continue to be seen, unless there is severe weather in major growing areas, so it is a fascinating market to follow.
Cafe
Coffee is one of the cultures in the world of major commodities and a major export of some countries.
The two main cultivated species of coffee plant Coffea canephora (robusta) and Coffea arabica () the last of which is considered more suitable for consumption because it is less bitter and more flavorful.
Nearly three quarters of the culture in the world is Arabica, Robusta, but is less susceptible to diseases and can be grown in environments where arabica will not thrive. Robusta coffee contains about 40-50% more caffeine than arabica, and is used as a cheap substitute for arabica in many commercial coffee blends.
Most arabica coffee beans originate from Latin America, East Africa, Arabia, or Asia. Robusta coffee beans are grown in West and Central Africa, Southeast Asia and Brazil.
The sugar market came to life in 2005, and coffee followed soon after, the growing demand not accompanied by increased supply, like many developing countries become richer and increase their consumption of coffee.
About the Author
Mike Estrey is the Head of Research for Blue Index, the Online CFD Trading Specialists. A free 15 day trial of their CFD Research is available, along with CFD Trading Seminars and Workshops.
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