Commodity Exchange V

Commerce SSS1 Third Term

WEEK 5

Commodity Exchange V

Performance Objectives

The student should be able to:

     1. Identify the major constraints to commodity trading in Nigeria.

Content

Constraints to Commodity Trading

The following are the constraints or problems of commodity trading:

1. Inadequate Supply: The supply of some commodities may be inadequate especially when unexpected poor harvest affects the discharge of a future contract.

2. Bad Weather: Most of the tradable commodities, especially agricultural products, are subjected to climatic or weather condition, thereby causing a limitation to commodity trading.

3. Inadequate Knowledge of the workings of the Commodity Exchanges: Inexperienced and unskilled agents and contractors which lack the skills and knowledge of the workings of the commodity exchange…