Commodity Market

Issue

   The commodity market allows the means of trading materials and other products (e.g., oil, wheat, livestock) between nations. The problem with the commodity market is that if a particular issue occurs in a specific region, it negatively affects the price of the commodity in other regions as well.

Solution

   To prevent this, the commodity market should become segmented and regionally-based so that any detrimental effects that may occur would be restricted to that specific region (e.g., corn-east, corn-west, etc.). For example, if a serious drought occurs in a specific region, the price reflected in the commodity market would only affect that particular region of the world and not elsewhere that may produce the same commodity.

   By segmenting the market, not only will it provide a certain level of protection against natural disasters, it also provides protection for other situations as well (such as military conflicts or trade embargoes). For example, if an armed conflict occurs in the Middle East, it would only affect the price of oil from that particular region and not oil produced elsewhere such as the Americas (America, Brazil), Asia (Russia, Kazakhstan), or Arctic (Canada, Norway).

   In summary, the commodity market should become more segmented so that regional effects don't impact the entire global economy.