Pricing Strategies in Commodity Markets

There are a great many products that do not have the luxury of brand identification. They are the great unwashed, the commodity products for which then is virtually no loyalty among their customers. These products are mainly sold on the basis of price and availability with service and terms being significant but less important factors. A quick scan of the futures exchanges will provide a list of the major products in this category. All products are characterized by being traded in markets which are fairly efficient and quite volatile in terms of price. It is this volatility, especially on the down side, which creates the problems on which we hope to shed some light.