# How commodities move Why some commodities are traded across the world while others stay home, how freight, ships, pipelines and chokepoints shape the routes, and how to read trade statistics without being misled by codes, valuation, hubs and missing reporters. It ends with the policies that redirect flows: tariffs and escalation, export bans, sanctions, and the resource nationalism of producing countries. Source page: https://www.materialinsights.org/learn/commodities/how-commodities-move/ [Understanding Commodities](https://www.materialinsights.org/learn/commodities/) / Module 7 ## How commodities move Why some commodities are traded across the world while others stay home, how freight, ships, pipelines and chokepoints shape the routes, and how to read trade statistics without being misled by codes, valuation, hubs and missing reporters. It ends with the policies that redirect flows: tariffs and escalation, export bans, sanctions, and the resource nationalism of producing countries. 5 parts · 18 sections · about 45 minutes · 0 of 5 parts read ### By the end you will be able to - Explain why the traded share of output ranges from 10% or less for timber and rice to over 70% for rubber, coffee and cocoa. - Read a commodity's trade table critically, checking HS scope, FOB and CIF valuation, mirror gaps, hubs and missing reporters. - Describe how freight costs, ship size and the inelastic supply of ships shape where commodities can be sold and why rates swing. - Distinguish chokepoints that trap supply from those that only lengthen voyages, and explain why embargoes and sanctions usually reroute rather than stop trade. - Calculate an effective tariff and explain how escalation, export restrictions and resource nationalism shift where processing happens. - Assess the risks that commodity dependence poses to exporting countries, and the evidence for and against the resource curse. ### Contents 1. [Part 1 Who ships what to whom](https://www.materialinsights.org/learn/commodities/how-commodities-move/p1/) Only some commodities travel. Whether a material crosses a border depends on its value per tonne, on where deposits and climates sit, and on how hard governments protect home producers. This part measures how much of each commodity is traded, separates the view by weight from the view by value, and follows the few corridors that carry most of the tonnage. - The traded share of output follows geography, value per tonne and protection - A handful of corridors carry most of the tonnage - Industrialisation turned rich regions, and then China, into importers 2. [Part 2 Reading trade data](https://www.materialinsights.org/learn/commodities/how-commodities-move/p2/) Trade statistics look precise, yet one cargo can appear at two values, under a code that covers several products, credited to a country that never mined it. This part explains how the records are built, why exporters' and importers' reports disagree, how hubs distort the picture and how researchers reconcile the numbers, using flows from the table as worked examples. - An HS code defines what is counted, and its scope rarely matches a commodity - FOB and CIF: the freight wedge between two reports of one cargo - Mirror statistics: when two reports disagree, the gap is information - Hubs and re-exports distort the map, and BACI reconciles what it can 3. [Part 3 The economics of moving bulk](https://www.materialinsights.org/learn/commodities/how-commodities-move/p3/) Freight behaves like a tariff that falls with technology and rises whenever ships are scarce. Its level decides which deposits can reach distant markets; its swings move delivered prices and trading profits. This part covers how falling freight globalised markets, why ships grew, why rates are so volatile, and how pipelines, LNG, rail, river and containers divide the work. - Freight works like a tariff, and its fall globalised one market after another - Bigger ships cut the cost per tonne, and Suez gave the push - Freight rates swing hard because the fleet cannot grow quickly - Pipelines, LNG, rail, river and containers divide the work 4. [Part 4 Chokepoints, embargoes and sanctions](https://www.materialinsights.org/learn/commodities/how-commodities-move/p4/) Ocean trade funnels through a few straits and canals, and politics can close any of them. Yet closures and embargoes have rarely starved a country of oil or grain, because cargoes are interchangeable and can be rerouted. Their usual effect is longer voyages, higher freight and a reshuffling of who buys from whom. This part examines the passages, the embargoes and the sanctions that test them. - A few narrow passages carry a large share of seaborne trade - Embargoes leak because oil and grain are interchangeable - Sanctions reroute trade more often than they stop it 5. [Part 5 Trade policy and the producing countries](https://www.materialinsights.org/learn/commodities/how-commodities-move/p5/) Trade policy once meant importers protecting their farms and factories. Since the boom of the 2000s, exporters have become the active side, taxing, banning and licensing raw materials to hold down prices at home, win processing or gain leverage. This part covers both sides, then asks what heavy reliance on commodity exports does to the countries that live on them. - Importers protect farms and processing, and escalation hides the true rate - Export taxes, bans and quotas push the cost of a shortage onto importers - Dependence turns world prices into national shocks, but the curse is not destiny - Resource nationalism pulls processing toward the mine 6. [Wrap-up Key terms, try it in the table, final quiz, sources](https://www.materialinsights.org/learn/commodities/how-commodities-move/review/) [Start: Part 1, Who ships what to whom →](https://www.materialinsights.org/learn/commodities/how-commodities-move/p1/) ## Other sections - [Who ships what to whom](https://www.materialinsights.org/learn/commodities/how-commodities-move/p1/index.md) - [Reading trade data](https://www.materialinsights.org/learn/commodities/how-commodities-move/p2/index.md) - [The economics of moving bulk](https://www.materialinsights.org/learn/commodities/how-commodities-move/p3/index.md) - [Chokepoints, embargoes and sanctions](https://www.materialinsights.org/learn/commodities/how-commodities-move/p4/index.md) - [Trade policy and the producing countries](https://www.materialinsights.org/learn/commodities/how-commodities-move/p5/index.md) - [Key terms, quiz and sources](https://www.materialinsights.org/learn/commodities/how-commodities-move/review/index.md)