How commodities move: Reading trade data
Understanding Commodities / Module 7: How commodities move Part 2 of 5Reading trade data
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.
2.1 An HS code defines what is counted, and its scope rarely matches a commodity
Customs records use the Harmonized System (HS), revised every few years by the World Customs Organization. It has four levels: 21 sections, 2-digit chapters, 4-digit headings and 6-digit subheadings, about 5,000 products in all. Beyond six digits each country uses its own tariff lines, so international comparison stops there. Countries report annual trade by product and partner to the UN Statistics Division, which publishes it as UN Comtrade. It covers more than 95% of world trade, but omits flows under $1,000, and some detail is withheld for confidentiality and appears only in totals.
Three scope problems recur in the table. First, a code can be broader than the commodity. HS 8105 lumps cobalt mattes, intermediates, unwrought metal and scrap together. Gallium has no code of its own and hides in 8112.92 with other minor metals. HS 0901 mixes green and roasted coffee, so a roaster's exports look like a grower's.
Second, one commodity can be spread over several codes. Crude oil (2709) is a $954 billion export trade in 2024, and refined products (2710) another $775 billion. Soybeans split into beans (1201), meal (2304) and oil (1507). Argentina, which crushes at home, leads oil exports with 44.4% and is second in meal with 22.4%, yet supplies only 2.3% of bean exports.
Third, the stage of processing tells you who processes. China took 63.2% of copper concentrate imports but 42.6% of refined cathode imports, because it smelts much of the world's ore. Before reading any share, check what the code includes and which stage of the chain it captures.
2.2 FOB and CIF: the freight wedge between two reports of one cargo
Free on board (FOB) is the value of goods loaded at the exporter's port; the buyer then arranges and pays for the voyage. Morgan's gloss is plain: under FOB the importer takes possession once the grain is on the vessel, while under cost, insurance and freight (CIF) the exporter must deliver it to the destination. Cost and freight (CFR) leaves out insurance. The iron ore benchmark, for example, is assessed as 62% iron ore CFR China.
Geman notes that futures exchanges quote FOB prices. A seller who agrees a CIF price for delivery a year ahead therefore carries two risks: the commodity price, hedged with futures, and the freight rate, hedged with forward freight agreements. The two parts of one CIF price are hedged in different markets.
In trade statistics, exporters usually report FOB and importers CIF. World imports should therefore exceed world exports by the cost of freight and insurance. Gaulier and Zignago estimate that margin for the BACI database with a gravity-type equation. The CIF rate rises with distance, falls when partners share a border, rises when the importer is landlocked, and falls as the product's value per tonne rises. Their mean estimates run from 2.7% to 3.4% by specification, well below the 8% often assumed. Direct customs data in Hummels's work ranged from 3% for the United States to 13.3% for Paraguay.
An average hides the bulk end of the range. Radetzki and Wårell note that Brazilian iron ore or South African manganese ore loaded on rail is worth much less than half its CIF price in the user's country. For cheap bulk cargoes the wedge can be larger than the value of the ore at the mine.
- Morgan (1979), Merchants of Grain · pdf p. 400
- Humphreys (2015), The Remaking of the Mining Industry · pdf p. 126
- Geman (2005), Commodities and Commodity Derivatives · pdf pp. 14-15
- Gaulier & Zignago (2010), BACI: International Trade Database at the Product-level web ↗ · pdf pp. 3, 12-16
- Radetzki & Wårell (2021), A Handbook of Primary Commodities in the Global Economy · pdf p. 124
2.3 Mirror statistics: when two reports disagree, the gap is information
Each bilateral flow can be reported twice, once by each partner. These mirror flows rarely match. At the 6-digit level the two reports differ by more than 100% for over half the observations in Comtrade. Customs officers check the origin of imports carefully because it sets the tariff, but care less where exports go. Detail is withheld, goods are misclassified, and shipments straddle year ends. Small errors matter: if the true CIF/FOB ratio is 1.06, an importer overstating by 1.5% and an exporter understating by 1.5% turn it into 1.09, raising the implied freight cost by half. Raw gaps cannot be read as freight.
The largest gaps in the table come from countries that do not report. Potash imports in 2024 were $18.3 billion, reported exports only $8.9 billion. Russia and Belarus, which mined about 35% of world potash in 2024 (Conway says roughly a quarter), were silent. Bauxite imports were $12.1 billion against exports of $2.5 billion; Guinea, the largest miner, does not report, so Australia appears to lead with 66.9%. Crude oil exports were $954 billion against imports of $1,305 billion, and Russia, the top oil exporter in Radetzki and Wårell's 2018 table with 13.1%, is missing. USDA puts Russian wheat exports for 2025/26 at 48 million tonnes, about a fifth of the world total, yet Comtrade lists Canada first. Cobalt imports were more than twice exports, and Congo, which mines about three quarters of the world's cobalt, is absent from the leading exporters.
The rule follows. When exports and imports differ by more than freight could explain, look for the missing country on the other side. Importers' reports are often the only record of a non-reporter's sales.
- Gaulier & Zignago (2010), BACI: International Trade Database at the Product-level web ↗ · pdf pp. 11, 13
- Radetzki & Wårell (2021), A Handbook of Primary Commodities in the Global Economy · pdf p. 55
- USDA (2026), World Agricultural Supply and Demand Estimates, October 2026 web ↗ · World Wheat Supply and Use table
- Morgan (1979), Merchants of Grain · pdf pp. 337-339
- Conway (2023), Material World · pdf p. 140
2.4 Hubs and re-exports distort the map, and BACI reconciles what it can
Some countries look far larger in trade than their mines or farms justify, because cargoes pass through them for refining, roasting, grinding, storage or finance. In unwrought gold, Switzerland led both exports (23.0%) and imports (18.9%) in 2024, with the United Kingdom and Hong Kong next in exports: mine doré goes to Swiss refiners, bars sit in London vaults, smaller bars go to Asia. In coffee, Switzerland (8.9%) and Germany (8.7%) export more by value than Colombia (8.1%). The Netherlands takes almost a quarter of cocoa bean imports for its grinders and ranks among the top exporters of refined oil products with Singapore.
Hubs attract trade for physical reasons, such as deep ports and processing plants, and institutional ones. In 1976 Cargill told a US Senate subcommittee that its Geneva arm, Tradax, could not disclose its Brazilian soybean dealings because Swiss law made it a crime. Switzerland joined the UN only in 2002. Re-exports double-count and blur origin, which is why Radetzki and Wårell warn that traded shares are overstated, notably for tin.
CEPII's BACI database repairs what it can. It starts from 6-digit Comtrade data, converts quantities to tonnes using mirror flows, and strips an estimated CIF margin from import values. It then rates each country's reporting reliability from the size of its mirror gaps, cleaned of product and partner effects, and averages the two reports with more weight on the reliable one. The result is a single value and quantity per flow for more than 200 countries, against about 130 Comtrade reporters in an average year of 1994-2007 (almost 150 in all, by the paper's summary). BACI drops Hong Kong and US re-exports, whose final destination cannot be known, and it cannot recover trade between two non-reporters.
- Morgan (1979), Merchants of Grain · pdf p. 311
- Blas & Farchy (2021), The World for Sale · pdf p. 297
- Radetzki & Wårell (2021), A Handbook of Primary Commodities in the Global Economy · pdf p. 49
- Gaulier & Zignago (2010), BACI: International Trade Database at the Product-level web ↗ · pdf pp. 3, 8, 11-12, 17-20
See it in the table
Oil Crude oilK PotashCu CopperFe Iron oreMn ManganeseAu GoldCo CobaltGa GalliumMz MaizeWh WheatSoy SoybeansCf CoffeeCc CocoaCheck your understanding
World reported imports of potash in 2024 were about twice reported exports. What is the most likely main cause?
A gap that large cannot be freight. Russia and Belarus mined about 35% of world potash in 2024 (Conway puts it at roughly a quarter) and did not report, so their sales appear only in importers' records.In BACI, how does the estimated CIF rate change as a product's value per tonne rises?
Gaulier and Zignago include the world median unit value in their gravity equation; its coefficient is negative, so heavy cheap goods carry higher CIF margins.Why does Switzerland lead world exports of unwrought gold?
Switzerland is a refining and trading hub: doré arrives from mines worldwide and leaves as refined bars, so it appears on both sides of the trade table.