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Raw Materials Write For Us: Raw materials are those elements obtained directly from nature that will be used to make a product. Therefore, the various individual materials that make up a consumer good can also be called raw materials. To write for us, you can send us an email at

For example, a bed is made up of the raw materials wood and iron, which were manipulated and modified after being obtained from nature to obtain a piece of furniture.

What is meant by raw material?

  • Any substance taken from the natural world and used to create consumer goods, products, or energy is a raw material.
  • Various raw materials are categorised according to their origin (e.g., animal, vegetable, fossil, or mineral) (renewable or non-renewable).
  • Raw materials can be used in their natural state among the raw materials. They can be acquired through mining, fishing, agriculture, or keeping animals—for instance, fruits, vegetables, fish, meat, or sand.

When it comes to the primary sector, where the process of producing goods or services starts, raw materials are crucial. Likewise, they form a component of the wealth of a country and constitute a significant base in the global economy.

What are the raw materials and their classification?

Raw materials are the elements that we find in nature and are essential for producing industrial products. We can classify raw materials according to their origin or availability.

Types of raw materials

The raw materials are categorised based on their place of origin, their accessibility, or the industrial transformation process they must go through.

By its origin

  • Vegetable origin
  • Animal origin
  • Mineral originFossil origin
  • Liquid or gaseous origin

By your availability

  • Superabundant raw material
  • Renewable raw material
  • Non-renewable raw material

Importance of raw materials

The production of raw resources has typically been viewed as a significant source of prosperity for a nation. It is due to the information that the resource in question is naturally abundant in the area in question.

But when economic theory advanced and the first large-scale factories emerged, these products’ drawbacks became clear. We are mostly referring to their unpredictable prices and minimal added value.

Reliance on the production of raw materials as the primary source of revenue over time evolved into a clear indicator of economic sluggishness. While this was happening, industrialised nations focused on manufacturing and then on the services industry.

One of its key problems is the volatility of raw material prices, which is brought on by their scarcity and dependence on external variables (such as the weather). We might also add that significant upfront costs may be necessary for its exploitation.

Commodities in financial markets

Financial futures are currently one of the most frequently utilised tools to protect against volatility. Producers can protect themselves from potential price declines with these contracts. It agrees on the rate through an agreement months before the production of raw materials.

Financial market participants can invest in these assets just like any other asset without owning them. Corn, coffee, sugar, soybeans, wheat, gold, silver, platinum, crude oil (both Brent and West Texas), and natural gas are the top commodities traded on the financial markets.

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