Commodity Market

Issue

   The commodity market provides the means for trading products and raw materials among interested parties (e.g., oil, wheat, gold, livestock). The problem is if an issue occurs in a particular region of the world, it also negatively affects other areas of that commodity as well.

Solution

   To correct this, the commodity market should become more segmented and regionally-based so that any detrimental effects that may occur in a particular region of the world, would be limited to that area of the market (e.g., corn-east, corn-west, etc.).

   By regionalizing the market, not only will it provide a certain degree of protection against natural disasters, it also will provide protection against man-made situations as well (such as military conflicts or trade embargoes).

   For example, if an armed conflict occurred in the Middle East, it would only affect the price of oil from that particular region and not elsewhere such as the Americas (America, Brazil), Asia (Russia, Kazakhstan), or the Arctic (Canada, Norway).

   In general, the commodity market should be redesigned so that regional events won't impact the global economy.