Commodity Specific Knowledge

Commodity Specific Knowledge is when procurement has a sound understanding of the global, economic, exchange factors affecting the commodity and also the suppliers available and cost drivers. A commodity is one which there is no qualitative differentiation across a market. Some examples include grains, petroleum, aluminium, copper, gold, beef, salt, sugar, tea, coffee, oil and natural gas.

The price of a commodity is often down to its market as a whole where supply and demand fluctuates. Category specific knowledge will determine the correct strategy to adopt, be it a spot or futures contract based on in depth knowledge and analysis.

CIPS Procurement Topics

Related concepts

Commodity Strategies

[Commodity strategy] ... should be proportionate to the value, complexity and strategic importance of the commodity (The Scottish Government).

Find out more