Commodity Market

Issue

   The commodity market provides the means for trading numerous products and raw materials (e.g., oil, wheat, gold, livestock) among participants. The problem is that if an issue occurs in a particular area of the world, it may also negatively affect other regions as well.

Solution

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

   Not only will this provide a certain degree of protection against natural disasters (like a drought or flood), but it also provides protection against man-made situations as well such as military conflicts or trade embargoes.

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

   In general, the commodity market should become more regionalized so that negative events don't impact the entire global economy.