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Commodity Trading Platform: What It Is and How to Choose One

The words "commodity trading platform" cover very different things. Some are exchanges for futures, some are brokers, and some are marketplaces where companies trade physical cargoes. Here is how to tell them apart.

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Exchanges, brokers and marketplaces

A commodity exchange trades standard contracts, mostly futures, which are used to fix a price or to speculate and are seldom delivered. A broker arranges deals for a fee and often takes part in the negotiation. A B2B marketplace, such as Comdity, lets companies post real offers and requests for physical goods, and they agree the terms directly with each other. Which one you need depends on whether you want a price exposure or a physical cargo.

What a B2B marketplace does

On a marketplace, a seller posts the product, the quantity, the origin, the loading port and the delivery period, and a buyer posts what it needs and where it must arrive. Companies answer with offers and counteroffers; see offer and counteroffer. When both sides agree, they exchange contact details and write the sales contract, so the platform is not a party to the deal.

What to check on a platform

Do companies have to register with a company email? Are listings confirmed before they are shown? Are the delivery terms clear and consistent, such as FOB, CFR and CIF; see FOB vs CFR vs CIF? Is the origin of the goods shown? Can you see what the platform does and does not do, for example whether it holds money or goods? A platform that is clear about these points is easier to trust.

What a platform cannot do for you

It cannot check every company for you or guarantee a deal. Check the other side yourself: the company registration, the references, the inspection at loading and the documents; read how to find commodity suppliers and the export and import documents. Use a bank and an independent inspector for large cargoes.

Which products

Comdity covers bulk commodities that move by sea: agricultural products such as wheat and rice, minerals and ores such as iron ore, chemicals and fertilizers such as urea, raw materials such as timber, and metals such as steel. Open the list of commodities to see all of them.

How a first deal on a marketplace goes

The company registers with a company email. It posts a listing, which is confirmed by email before it is shown. Other companies send offers, and the two sides negotiate with offers and counteroffers until they agree. Then they receive each other's contact details and write the sales contract, arrange the ship, the inspection and the payment. The first deal is best a small one, to test the other side before larger cargoes.

Warning signs

Be careful with any platform or company that asks for a fee or a deposit before you have seen a real offer, that promises very low prices, that hides who runs it, or that pushes you to leave the platform and pay a person. A genuine platform explains what it does, who owns it and where it is based. Read its terms of service and privacy policy before you register, and check that the company behind it gives a real address.

Ready to trade?

Post a sell offer or a buy request, or look at the active listings of the product you need.

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