Commodity prices are often erratic. This is because there are many factors that affect the demand and supply of a commodity, and thus affect the price too. This article aims to add further clarity to what these factors determining commodity pricing are in order to give everyone a basic understanding of how the market for commodities works. What is a commodity? Before delving into what these factors are it’s crucial to establish what a commodity is. Some prime examples of commodities include; Copper Crude oil Wheat Iron ore Coffee beans Gold In economic terms, you can easily differentiate a commodity by labeling it as an asset whereby if depletion occurred there would be a monumental impact on the world and the growth of specific countries. Let’s use Chile and the production of copper as an example. Chile has control of approximately 20% of the global copper reserves. If the scarcity of copper arose the country would be in a troublesome…