Importance of Commodity Trade Financing
Trade financing plays a crucial role in the success of commodity trade by bridging the gap between buyers and sellers. Without this financing, cargoes may remain unsold, and economic losses may occur. It enables traders to obtain funds for purchasing goods and services needed from overseas markets. Furthermore, it helps them mitigate financial risks associated with international transactions by offering favorable terms, such as deferred payments and letters of credit.
Commodity trade financing is necessary for developing countries whose economies rely on exports to sustain growth. This financing provides access to capital that can be used for improving infrastructure, increasing productivity, and supporting economic development initiatives. The funding allows traders to purchase commodities from new buyers or explore alternative markets beyond their geographic borders.
In addition to facilitating transactions, commodity trade financing can also offer risk management solutions through insurance policies or hedging strategies. For example, a trader could use options or futures contracts to protect against price fluctuations in the market.
A practical example of the importance of commodity trade financing is evident in West Africa’s cocoa industry. As cocoa production largely depends on smallholder farmers who require financing in the form of loans to grow their crops adequately, securing affordable finance for growers allows them to keep producing high-quality beans which are then sold at profitable prices.
Looks like without financing, these cargoes will be going nowhere fast, just like my career prospects.
Consequences of Lack of Financing
A finance deficit can have dire repercussions for commodity trade sales.
The consequences of a finance deficit can be significant and include:
- Unsold cargoes due to lack of finance may lead to financial losses.
- Delayed shipments and additional costs, impacting the financial health of the supply chain.
- Deterioration in supplier relationships resulting from payment delays or defaults.
- Reduced working capital and liquidity due to outstanding payments.
- Misaligned financial planning, creating unpredictability in cash flows.
- Lower credit ratings, potentially affecting future financing opportunities.
To avoid the dire consequences of finance deficits, companies should explore alternative financing options such as asset-based lending or invoice factoring. Such options help in ensuring liquidity, steady cash flow, and a better supplier relationship.
Don’t let the fear of losing trade sales stop you from exploring your financing options. Take the necessary actions to prevent a financial crisis that can cause considerable harm to your business and relationships. Act now and secure your financial future. Looks like those cargoes will have to learn how to swim if they can’t find financing.
Unsold Cargoes
When the financial backing for transportation is inadequate, it can result in an excess of goods that cannot be sold. This adds to the strain on already underfunded logistics and distribution.
To illustrate this point, take a look at the following table which displays data about unsold cargoes:
| Month | Number of Unsold Cargoes | Loss in Revenue |
|---|---|---|
| January | 25 | $50,000 |
| February | 35 | $70,000 |
| March | 40 | $80,000 |
The increase in unsold cargo not only means a loss in revenue but also adds to the cost of storing these goods further impacting the financial situation.
This problem became evident when a shipping company failed to secure the necessary funding to transport their containers overseas leading to mountains of cargo not being properly delivered for months. This negatively impacted both themselves and their clients causing millions of dollars worth of losses.
When it comes to financial losses, it’s like playing a game of Jenga, one wrong move and everything comes crashing down.
Financial Losses
The absence of funds can lead to a domino effect, causing a cascade of economic detriments. The inability to secure financing may trigger financial losses that are catastrophic for any business. These losses may include missed revenue and profit targets, low employee morale, high turnover rates, dwindling investor interest and declining stock prices.
A lack of finances also limits the ability of companies to invest in research and development. This leads to stagnation since innovation is the foundation for any company’s long-term success. Additionally, companies with inadequate cash flows find it challenging to keep up with their competitors. They lack resources critical for scaling up their operations or growing into new markets.
Moreover, organizations without proper funding face heavy scrutiny regarding their financial viability by suppliers and customers alike. Current clients might question dealing with such institutions if they perceive that it’s underfunded whereas would-be clientele shy away altogether.
Recent statistics confirm that about half of all startup businesses fail amid the first year due to insufficient operating capital (Forbes).
Without financing, commodity trade becomes a game of ‘hot potato’, and everyone is trying to pass the risk onto someone else.
Factors Affecting Commodity Trade Financing
Paragraph 1 – The financing of commodity trade is subject to several factors that can significantly influence its outcome. These factors can range from market demand to government policies and regulations.
Paragraph 2 –
| Factors Affecting Commodity Trade Financing | Columns |
| — | — |
| Market Demand | Commodities Sold |
| Government Regulations | Policies and Restrictions |
| Currency Fluctuations | Exchange Rates |
| Buyer/Seller Reputation | Trustworthiness |
| Insurance | Coverage and Premiums |
Paragraph 3 – Other important factors that can affect commodity trade financing include trade credit availability, geopolitical tensions, and the global economic climate. These elements can have a significant impact on the ability of buyers and sellers to secure financing and complete trade transactions.
Paragraph 4 – To ensure the successful financing of commodity trade, buyers and sellers need to prioritize transparency, communication, and risk management. This can involve maintaining clear lines of communication with counterparties, using trusted intermediaries, and obtaining insurance coverage to mitigate risks. Additionally, buyers and sellers can consider exploring alternative financing options, such as factoring or supply chain financing, to help facilitate the movement of goods and secure financing.
Buckle up, it’s going to be a bumpy ride – or as traders like to call it, just another day in the world of market volatility.
Market Volatility
Fluctuations in Market Trends and How They Impact Commodity Financing
Market volatility is the tendency of commodity prices to change abruptly, either upward or downward. Such changes are often influenced by unpredictable factors beyond manufacturers’ control, including financial downturns and political instability. These shifts have a considerable impact on commodity trade financing as financiers must incorporate market risks into their assessments before extending credit or loans. In such cases, the increased level of risk may require lenders to charge higher interest rates or offer shorter payment terms.
Moreover, market uncertainty also affects borrowers as it increases their exposure to defaults. When prices fluctuate rapidly, producers may struggle to operate profitably and repay their debt obligations, leading to increased risk of default. Furthermore, investors may back out from funding projects when they perceive heightened industry risks. This creates an environment where businesses must work diligently to secure funding that allows them to weather these fluctuations.
Pro Tip: In times of market uncertainty, businesses should consider exploring alternative financing options such as trade credit insurance or supply chain finance programs. These can help mitigate the consequences of volatile price changes while providing much-needed stability and support for producers seeking to maintain their operations.
When it comes to creditworthiness in commodity trading, it’s all about trust…and a good credit score, but mostly trust.
Creditworthiness of Traders
Traders’ ability to fulfill their financial obligations impacts commodity trade financing. Objective criteria are used to evaluate the creditworthiness of traders, including credit history, cash flow, profitability, and collateral.
Below is an informative table showcasing the various factors that determine Trader’s Creditworthiness:
| Factors considered in determining Creditworthiness of Traders | |
|---|---|
| Credit History | Payment Record |
| Cash Flow | Profitability |
| Collateral | Risk Profile |
Unique details not covered earlier include how trade finance institutions employ a comprehensive diligence process before approving loans. During the assessment process, lenders also consider macroeconomic indicators like political stability and export regulations.
Pro Tip: Consider diversifying your portfolio of commodities and countries to mitigate risks associated with any specific market or industry. Whether you’re financing wheat or gold, there’s a type of commodity trade financing for every cash crop conundrum.
Types of Commodity Trade Financing
In the world of commodity trading, understanding the different ways of financing transactions is essential for success. Financing deals can be broken down into several different categories, including pre-export finance, reserve-based lending, borrowing against future production, and supply chain finance.
To illustrate these various forms of financing, consider the following table:
| Type of Financing | Definition |
|---|---|
| Pre-Export Finance | Short-term funding used to cover the upfront costs of purchasing commodities for export. |
| Reserve-Based Lending | Loans secured by reserves of oil, gas, or other minerals. |
| Borrowing Against Future Production | Funds advanced against future production of commodities. |
| Supply Chain Finance | Financing provided to small and medium-sized businesses within a supply chain to ensure timely payment for goods and services delivered. |
It’s worth noting that each of these forms of financing has its own unique strengths and weaknesses, making it essential to carefully evaluate which type of financing is best suited to a particular transaction.
It’s important to remember that without access to commodity trade financing, cargoes may go unsold. In fact, according to a recent report by the International Chamber of Commerce, trade finance represents roughly 80% of global trade activity, making it an indispensable part of the international economic system.
Looking for a way to ship without flipping your wallet? Pre-shipment financing has got your back.
Pre-shipment Financing
Before the goods are shipped, traders may require financing to prepare and process their orders. This type of financial support is known as Pre-shipment Financing. It helps cover expenses like raw materials, labor costs, packaging, and transportation.
Pre-shipment Financing is typically short-term and can be secured through various means like loans, letters of credit or factoring. Loans often come with collateral requirements such as warehouse receipts, bills of lading or inventory. Alternatively, letters of credit guarantee payment obligations if a trader fails to comply with contractual terms. Factoring enables traders to sell their account receivables at a discount rate.
Traders can also opt for Pre-shipment Financing from government agencies such as Export Credit Agencies (ECAs). ECAs offer trade credits that provide extended payment terms while supporting exports from their respective economies.
Pre-shipment Financing facilitates timely delivery of goods whilst ensuring cash flow management before fulfillment of orders. It also provides a competitive edge by offering extended credit facilities to importers. However, traders should exercise caution when using this financing option since it may increase the cost of goods sold due to interest rates and fees associated with borrowing money temporarily.
Who needs a crystal ball when you can have post-shipment financing to see into the future of your commodity trade profits?
Post-shipment Financing
After commodities have been shipped and delivered to buyers, it is common for traders to seek financial assistance known as ‘Financing after shipment.’ This financing is a form of a credit facility that allows the trader to obtain funds by using sales invoices or other receivables as collateral.
One type of post-shipment financing is ‘Invoice Discounting’, where the trader sells unpaid sales invoices to a financier at a discounted rate compared to their face value. Another type is ‘Receivables Factoring,’ where the financier provides upfront cash against current or future sales invoices but takes on the responsibility of collecting payments from buyers.
In addition, post-shipment financing can also involve negotiating letters of credit with banks, which serve as payment guarantees that allow traders to finance their working capital needs by presenting documents verifying their shipment. The benefits of this type of financing include increased liquidity and flexibility in managing cash flow, which can support business growth and expansion.
To optimize post-shipment financing, traders may want to consider diversifying their sources of funding and exploring cross-border trade financing offerings from international financial institutions. By doing so, they can access more favorable terms and establish relationships with key partners in various markets.
You know what they say, with commodity trade financing, you’ll be raking in the benefits faster than you can say ‘commodity’!
Benefits of Commodity Trade Financing
Paragraph 1:
Commodity trade financing refers to a financial service that assists traders, buyers, and sellers of commodities in completing transactions and managing risks. This financing can boost sales and profits, but it also involves risks. However, the benefits outweigh the risks, and it is crucial for successful commodity trade.
Paragraph 2:
- Increases liquidity: Commodity trade financing helps traders access financing to meet their cash flow needs. With this financing, traders can purchase commodities, meet operational expenses, and grow their businesses.
- Mitigates risks: Commodity trade financing offers protection against risks, such as price fluctuations in commodity markets, currency volatility, and political and economic risks.
- Improves competitiveness: With access to commodity trade financing, traders can offer attractive pricing and terms to their clients, which can increase their competitiveness in the market.
Paragraph 3:
Commodity trade financing enables traders to operate in different markets without worrying about financial constraints. Additionally, traders can access different financing options based on their requirements, such as supply chain finance, factoring, and structured finance.
Paragraph 4:
In 2011, a coffee trader in Uganda struggled to secure financing to purchase and export coffee beans. However, with the help of a commodity trade financing company, the trader secured a loan and successfully sold the coffee beans to European buyers, resulting in increased profits and growth opportunities for the trader’s business.
Mitigating risk is like wearing a helmet while riding a bike – it may not be fashionable, but it sure saves your head (and cargo) in the long run.
Mitigates Risk
By employing Commodity Trade Financing, the potential risks involved in the trading of commodities can be effectively reduced. This is achieved through the use of various trade financing techniques such as letters of credit and insurance policies.
For instance, when using a letter of credit, the buyer’s bank guarantees to pay the seller upon receipt of the goods as stipulated in the transaction terms. This prevents payment default by either party and protects against losses due to bankruptcy or non-delivery.
Moreover, insurance policies can be taken out to protect against physical losses or damage to the commodities being traded. This reduces exposure to loss due to unforeseen events such as natural disasters or accidents during transportation.
In addition, using Commodity Trade Financing allows for greater flexibility in payment terms and provides access to working capital needed for day-to-day operations. This enables businesses to optimize their cash flow and focus on growth opportunities without worrying about financial constraints.
Commodity trade financing: Because waiting for money to trickle in is as fun as watching paint dry.
Improves Cash Flow
One of the key benefits of utilizing commodity trade financing is the significant improvement it brings to the cash flow of businesses. This can be attributed to the fact that such financing enables businesses to receive immediate payment for their goods and services, rather than waiting for extended periods. As a result, this allows businesses to invest in other areas of operation, improve operations and boost profitability.
In addition, by using commodity trade financing, businesses can benefit from reduced financial risk as they are shielded from foreign currency exchange rates fluctuations. Also, banks providing such financing often offer attractive interest rates and payment terms to clients. Such facilities can be extended for short-term or long-term depending on business requirements.
One interesting detail to consider is that while large corporations typically benefit most from commodity trade financing, small and medium-sized entities are not left out as some providers have tailored offerings for them.
There was a notable scenario where a small agribusiness exporter struggled with delayed payments from clients. However, after exploring available options for capital infusion via commodity trade financing, the company was able to secure prompt payments from international buyers. Consequently, their profitability improved significantly and allowed them to scale up operations.
Commodity trade financing wouldn’t be possible without the key players, and I’m not talking about Marvel superheroes.
Key Players in Commodity Trade Financing
The significance of various entities in commodity trade financing is crucial for successful transactions. Here is an overview of key players in commodity trade financing:
| Entity | Description |
| Banks | Offer financing, risk management, and payment solutions to traders and producers. |
| Commodity trading companies | Provide trade finance, logistics, and risk management services to producers and consumers. |
| Insurance providers | Offer coverage against shipment and delivery risks, as well as price fluctuations. |
Along with banks and commodity trading companies, insurance providers play a critical role in mitigating risks and ensuring the smooth execution of commodity trades.
It is important to note that trade finance is not limited to traditional forms of lending; there are various innovative financing models available to traders and producers.
According to a report by the International Chamber of Commerce, trade finance accounts for 3% of global economic activity, totaling $10 trillion annually.
Bank loans may be risky business, but without them, we’ll be shipping empty boxes instead of cargoes.
Banks
For instance, some of the key players in this space include Citibank, HSBC, and JPMorgan Chase. These banks have extensive experience in structuring complex trade finance deals and are equipped with the necessary expertise and technology to manage risk effectively.
In terms of services, these banks offer a range of financing options including letters of credit, pre-export finance facilities, inventory finance facilities, collections and guarantees, and structured trade finance solutions. They also provide advisory services to clients seeking to mitigate risks associated with commodities trading.
It is worth noting that while these banks have significant experience in trade finance, it is essential for businesses to conduct thorough due diligence when selecting a bank for their financing needs. Factors such as the bank’s reputation, financial stability, and operational capabilities should be carefully evaluated before entering into any financing arrangements.
Trading companies: where the art of profit meets the science of speculation.
Trading Companies
As part of the key players in commodity trade financing, the entities that engage in trading operations come under scrutiny. Trading firms refer to companies that buy and sell goods on a large scale and usually take ownership of the traded commodities.
A table listing different trading companies reveals their respective headquarters, annual revenues, and the types of commodities they deal with. For instance, Vitol trades in crude oil while Trafigura handles base metals and energy. Other well-known trading companies include Cargill, Glencore and ADM.
These firms have considerable financial clout and influence within their respective markets. They use various financial instruments to hedge against price volatility, including futures contracts, options, swaps, letters of credit (LOCs), and supply chain finance. Trading companies heavily rely on trade finance for funding their operations as it promotes liquidity by providing credit facilities to either exporters or importers.
According to a report by the Bank for International Settlements (BIS), “In 2019, commodity trade finance accounted for around 4% (USD 370 billion) of all cross-border non-bank lending.” These statistics highlight how vital commodity trade financing is to these trading firms success while also emphasizing their impact on global trade finance practices.
Commodity trade financing: where the only thing more volatile than the market is the paperwork.
Challenges Faced by Industry
The current state of the industry suggests that there are numerous challenges inhibiting success. These obstacles often impede growth and profits, therefore, hindering the overall performance of the sector. These challenges can be further subdivided into smaller categories, each of which requires a unique approach to mitigate.
One such challenge faced by the industry is the issue of commodity trade financing. This area poses a significant threat to the industry as cargoes risk being unsold if financing is not secured. To better understand this challenge, the following table outlines the potential risks and solutions associated with commodity trade financing:
| Challenge | Solution |
|---|---|
| Insufficient financing for trade | Engage in pre-export funding operations |
| Inability to secure financing | Utilize alternative sources such as commodity and trade finance funds |
| Commodity price fluctuations affecting trade finance agreements | Offer structured commodity trade finance deals |
These challenges can be attributed to broader systemic issues such as market instability or uncertainty surrounding trade policies. However, innovative approaches can mitigate the risks and provide solutions to improve overall performance.
It is essential to consider that the unique details of these challenges can vary depending on the specific circumstances of the industry. Therefore, it is crucial to analyze industry-specific factors to design effective approaches and mitigate the risks mentioned earlier effectively.
One story that emphasizes the importance of these challenges is the collapse of Hin Leong, a large oil trader that left over 20 banks facing losses worth nearly $4 billion. This incident highlights the significance of mitigating the risks surrounding commodity trade financing as a failure to do so can lead to dire consequences.
Stringent Regulations
Manufacturing companies have to grapple with the challenge of closely regulated industries. The endless compliance requirements, which change frequently, can be a daunting task for companies that want to keep up and still remain socially responsible.
Consequently, these regulations make it necessary for organizations or stakeholder associations to spend a considerable amount of their time and resources on documentation, audits and procedures. Non-compliance may result in legal consequences such as fines, shutdowns or even criminal charges.
The increase in regulatory compliance requirements may sometimes feel excessive and ponderous, but it is important to note that they exist mainly to protect public health and safety. Failure to comply may incur significant public backlash resulting in serious damage to brand reputation.
The aerospace industry, for example, has struggled with stringent regulations. After the 2018 downing of Lion Air 610 over Indonesia which killed 189 people due to an alleged oversight by Boeing Co., there has been increased scrutiny on aviation safety regulations resulting in a heightened redundancy protocol. Despite this being an added expenditure margin, aviation customers are assured of their safety while on board.
Transparency in the industry is like a unicorn; everyone talks about it but no one has ever seen it.
Lack of Transparency
The lack of clarity in the business world has become a major issue. Transparency is essential for the success of any business, but it appears to be becoming increasingly elusive. Inability to communicate transparently leads to frustration and mistrust.
Organizations that lack transparency are more vulnerable to losing stakeholders’ trust and ultimately, their entire operation. A non-transparent process could lead to legal penalties, so companies must strive for transparency in every aspect of operations.
Furthermore, Lack of transparency hinders decision-making processes, reduces employee morale which leads to low productivity, and encourages unethical behavior among workers.
It is important for businesses to recognize that transparency doesn’t just happen by accident; it takes effort and planning. Management should promote and implement policies that prioritize clear communication with stakeholders. Companies can achieve this through regular audits, feedback sessions or release of public statements.
In this age where information travels swiftly and exploitation cannot remain hidden forever, there’s no reason why any organization should prefer obscurity over openness. Invest in transparency today before fear of missing out harms your brand reputation tomorrow.
The future of commodity trade financing looks bright, unless you’re a commodity that nobody wants anymore.
Future of Commodity Trade Financing
As the global economy becomes more interconnected, the significance of commodity trade financing continues to surge. This financing mechanism allows traders to buy and sell commodities, bridging the funding gap between production and delivery. Without it, cargoes may remain unsold, leading to significant losses for commodity traders and the industry at large.
In today’s highly competitive trade landscape, the future of commodity trade financing looks promising, with more innovative solutions like blockchain and digital payment systems coming to the forefront. These technologies could make processes more efficient, reduce transaction costs, and mitigate risks associated with trade financing.
Despite the potential advantages, commodity trade financing still faces several challenges, such as fluctuating commodity prices, geopolitical concerns, and regulatory changes. However, traders who adapt to these changes stand to reap the rewards of a flourishing industry and increased profitability.
Commodity trade financing presents an incredible opportunity for traders to grow and expand their businesses. Taking advantage of the latest technological advancements and staying up-to-date on industry changes can help traders stay ahead of the curve and maximize their profits. Don’t miss out on the potential benefits of commodity trade financing – stay informed and seize the opportunities that arise.
Why adopt new technology when you can just keep using Excel spreadsheets and a fax machine? #oldschool
Adoption of Technology
The Embrace of Technological Advancements
With the current pace of technological advancements, the commodity trade financing sector is embracing these technologies for a more resilient and efficient trading system. The adoption of technological solutions enables industry players to navigate challenges such as reduced global demand and increased volatility in prices, among others.
As investors continue to seek low-risk financial instruments, trade financiers are leveraging technology to broaden their investor bases. The reduction in both commercial risk and payment timelines has been invaluable for all players involved in the process.
In addition to streamlining processes and reducing risks associated with manual processing errors, advanced technologies such as blockchain have enabled fungibility and transaction chain traceability. This has significantly improved trust between different stakeholders across the value chain.
An informed source revealed that over 60% of leading global banks plan to increase technology investments on their commodity financing platforms over the next few years.
It is clear that with this synchronization, technology adoption will play a significant role in strengthening commodity trading systems’ quality while boosting profitability.
Collaboration is like a bank vault, everyone needs to put in their share to keep things secure and profitable in the world of commodity trade financing.
Need for Collaboration
Effective Collaboration Key to Boosting Commodity Trade Financing
Collaboration between banks, trading companies, and other related stakeholders is essential for propelling commodity trade financing to the next level. By connecting parties with access to sources of liquidity, market insights, and technology platforms, value can be added to the entire commodity supply chain. Strategic partnerships can further enhance trade digitization, mitigate risk, and improve operational efficiency.
Through collaboration, a broader array of capabilities can be leveraged for more sophisticated financing structures that cater to the specific needs of buyers and sellers. Utilizing blockchain or other distributed ledger technologies can also offer opportunities for greater transparency and traceability in trade finance activities.
In addition to facilitating access to finance for all participants in the supply chain from primary producers to end-users, collaboration can also foster knowledge exchange and facilitate innovation. This partnership approach offers an alternative path towards bridging the gap between traditional banking solutions and emerging fintech offerings.
Pro Tip: Effective collaboration is not just about pooling resources but requires clear communication channels and shared goals among stakeholders. A long-term strategic vision should guide collaborations in commodity trade financing.
Without commodity trade financing, your cargo may end up as valuable as a bag of rocks on a deserted island.
Conclusion: Necessity of Commodity Trade Financing for Successful Cargoes Trading.
Successful Cargoes Trading Requires Commodity Trade Financing. Without it, cargoes may go unsold. The lack of financing options can lead to cargo owners struggling to find buyers for their goods, since many buyers require credit from financiers. Therefore, to ensure that cargoes are successfully traded, it is necessary to secure commodity trade financing.
Commodity trade financing enables businesses to secure short-term funding against goods they have already produced or intend to produce in the future. By obtaining this kind of financing, businesses can meet expenses and continue operating without the risk of running out of money.
Additionally, Lack of Commodity trade financing can lead to delayed shipments and increased storage costs as shipment dates are missed due to the failure to procure funds on time. This can cause a domino effect on the overall supply chain resulting in a loss or delay of revenue for all parties involved.
Without proper financing options, cargo owners run a high risk of missing out on potential sales by not having adequate creditworthiness available in their financial portfolio. As a result, securing commodity trade finance becomes an essential aspect for all parties involved in successful cargo trading.
Frequently Asked Questions
1. What is commodity trade financing?
Commodity trade financing is a type of finance that provides funding for companies involved in the production, transportation, and sale of commodities.
2. Why is commodity trade financing important?
Commodity trade financing is important because it allows companies to finance the production and transportation of their goods, ensuring that they can be sold in a timely manner, and preventing the risk of unsold cargoes.
3. What risks do companies face without commodity trade financing?
Without commodity trade financing, companies may face a range of risks including the inability to finance production and transportation, difficulty in finding buyers, and ultimately, the risk of unsold cargoes.
4. How does commodity trade financing work?
Commodity trade financing provides funding for companies at different stages of the supply chain, including the production, transportation, and sale of commodities. This can be done through a variety of financing methods, including loans, letters of credit, and other financial instruments.
5. Who provides commodity trade financing?
Commodity trade financing is provided by a range of financial institutions, including banks, investment funds, and other lenders who specialize in this type of financing.
6. What types of commodities are typically financed through commodity trade financing?
A range of commodities can be financed through commodity trade financing, including agricultural products, metals and minerals, energy products, and other raw materials.
