17 Mar
2025
Highlights:
Agricultural commodities are goods that are derived from various processes such as cultivation, forestry, and animal husbandry. These primary agricultural products such as crops and livestock are raised and harvested to provide food, feed, fuel, and fiber. Moreover, these commodities are now traded on stock exchanges. Generally, agricultural commodities are categorized into six types, including cereal grain, oil seeds and pulses, meat, dairy, soft commodities like coffee, tea, sugar, etc., and miscellaneous agriculture products such as wood, rubber, and wool.
Agri-commodity trading helping farmers earn fair remuneration
Today, countries like India, China, Brazil, and the US are the main producers of most of the above-mentioned agricultural commodities. Despite the growing production and demand for these goods over the last several decades, the incomes of cultivators and animal herders in these nations haven’t increased proportionately. One major challenge for farmers is the absence of a unified market that connects sellers, buyers, companies, and brokers to determine fair prices for their produce.
Along with this, poor storage infrastructure and the absence of robust supply chains lead to a reduction in profits for farmers and cultivations. For instance, several agriculture marketplaces in villages and remote towns in these countries do not have cold storage facilities which help in preserving perishable agricultural products like vegetables and fruits. As a result, it has been seen that despite cultivating high-quality vegetables and fruits, a farmer sells off the produce at throwaway prices as the value goes down with each passing day.
In such a scenario, agricultural commodity trading helps create a marketplace where buyers and sellers can come together to decide the price of the produce. In the age of digitalization, many IT companies and agro-firms have joined hands to launch online platforms that aid in trading agricultural commodities. These web-based marketplaces help fix the value through futures and options contracts, which act as price protection in the long run.
Additionally, these platforms help connect different stakeholders even from the remotest parts of the country, thus enhancing market access significantly. This enables farmers and cultivators to cater to the demands of the customers easily and ultimately stabilizes the prices of food products. Many industry experts have also stated that the use of agri-commodity trading mechanisms helps promote sustainable agriculture practices. It has been seen that large food processing companies opt for farm produce which is cultivated using eco-friendly techniques such as organic farming. This increases the demand and price of organic products on these trading platforms, compelling farmers to shift toward green cultivation mechanisms.
Launch of innovative agricultural commodity trading platforms driving industry growth
The agricultural commodity industry is expected to gather a revenue of $2.2 trillion by 2032. The market accounted for $1.6 trillion in 2022 and is projected to rise at a CAGR of 3.2% during 2023-2032. In the last few years, many private companies and governmental agencies have launched online marketplaces that allow the sale of agricultural commodities easily. For instance, in February 2021, Louis Dreyfus Company, a French food processing firm, announced a partnership with Covantis S.A., a software company. Under this collaboration, a blockchain-powered agri-commodity trading platform was launched. Over the years, sellers, buyers, corporate houses, and brokers from over 30 countries have registered themselves on this web-based marketplace. The use of data analytics and other such digital technologies has improved the transparency and credibility of the platform.
On the other hand, in February 2025, the Department of Agriculture and Farmers’ Welfare, Government of India, announced the addition of 10 new agricultural commodities on the e-NAM platform with its specific trade-related parameters. E-NAM or e-National Agriculture Market is a government-owned online trading platform launched in 2014. Over the years, 176 agricultural commodities have been introduced into the marketplace, making it one of the biggest trading systems across the globe.
Winding up, the agricultural commodity market is expected to experience huge growth in the near future due to the growing volume of trade in developed and developing countries. Furthermore, the challenges associated with traditional marketplaces have led to a gradual transition toward online agri-commodity trading platforms, thus expanding the scope of the industry in recent times.
For more information on the key growth drivers and investment opportunities in the landscape, contact our experts here!
Akhilesh Prabhugaonkar
Author's Bio- Akhilesh Prabhugaonkar holds a bachelor’s degree in Electronics Engineering from the reputed Vishwakarma Institute of Technology. He has a special interest in the fields of forensics, world history, international relations and foreign policy, sports, agriculture, astronomy, security, and oceanography. An ardent bibliophile and melophile, Akhilesh loves to write on topics of his interest and various other societal issues. This love for writing made him enter the professional world of content writing and pursue his career in this direction.
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