Working in the fast-paced environment that is the commodity trading sector requires certain skills, more specifically soft skills. These soft skills are crucial for aspiring commodity traders and the businesses they work for. These skills can greatly benefit a business and improve your relationship with clients and employees.
What is Commodity Trading?
Commodity trading is the buying or selling of commodities. Commodities are divided into four main categories:
- Metals: This includes gold, silver, platinum, and copper. During market volatility, many investors put their money into precious metals, particularly gold, because of their status as having reliable value.
- Energy: Commodities include crude oil, heating, natural gas, and gasoline. Global economic developments and reduced oil outputs worldwide have increased oil prices. The demand for energy-related products has gone up, and oil supplies have dwindled.
- Livestock: The breeding and slaughtering of these animals supplies the trade in meat, milk, dairy, animal byproducts, leather, and wool. Overall, as a commodity, livestock is valued mainly for its meat.
- Agricultural Products: This includes corn, soybeans, wheat, rice, cocoa, coffee, cotton, and sugar. For investors interested in the agricultural sector, population growth could provide profits from rising agricultural commodity prices.
What are Soft Skills?
Soft skills can be thought of as people skills. These can include good communication and interpersonal skills, leadership, problem-solving, work ethic, and time management.
Soft skills benefit businesses when they are practised on a company-wide basis. For example, team members who can work well with people of different generations and backgrounds are generally more productive and able to focus better on projects.
Why Are Soft Skills In Commodity Trading Important?
During the hiring process, recruiters assess these soft skills to gauge how well you will fit into the workplace culture. Soft skills are practical indicators of a candidate’s ability to collaborate, navigate challenges, and contribute positively to team dynamics.
Is It Hard to Become a Commodity Trader?
The difficult and tedious part of becoming a commodity trader is getting the right qualifications. You must have a degree in either business, economics, accounting or finance. Then, you can complete an apprenticeship and start looking for a job in commodity trading.
Soft Skills Every Commodity Trader Needs to Succeed
You need certain soft skills to succeed in the commodity trading sector. These skills are important and benefit businesses in a lot of ways. The key soft skills a commodity trader needs include:
Effective Communication
One of the most important soft skills a commodity trader must have is effective communication. This not only involves clearly communicating ideas but also listening to client needs and concerns.
Time Management
Time management is extremely important for commodity traders with multiple clients and projects. You must know which projects and clients to prioritise and allocate their time for maximum efficiency.
Problem-Solving
In the world of commodity trading, unexpected challenges occur all the time. This is why problem-solving is such an important soft skill. You must be able to think on your feet, identify alternative solutions, and be able to address any concerns or objections during a sale.
Adaptability
In the ever-changing world of commodity trading being able to adapt is crucial. A successful commodity trader must be able to adjust their approach and strategies to meet the changing expectations and needs of clients. You should stay updated with industry trends and consumer behaviour to remain relevant in the competitive market.
Continuous Learning
A commodity trader should never stop learning. You should stay updated with industry trends, attend training sessions, and seek mentorship to continuously improve your skills. Continuous learning ensures you stay ahead of the competition and adapt to the changing world that is commodity trading.
The Work Environment of a Commodity Trader
A commodities trader’s work environment can differ depending on their specific role and employer. Commodity traders can work in various locations ranging from open-plan trading floors in financial institutions to remote work environments.
The work hours can also vary, but it’s common for traders to work long hours to stay up to date with global commodity markets. A business’s culture can heavily impact the work environment, where the fast-paced nature of the job often creates a competitive culture with traders constantly looking to gain an advantage.
What is a Soft Commodity In Trading?
‘Soft commodity’ refers to an agricultural good that is grown instead of extracted or mined. Some soft commodities include cocoa, rice, cotton, coffee, soya beans, and sugar. These types of commodities can also be referred to as tropical or grown commodities, or food and fibre commodities.
It is important to note that there’s no definitive soft commodities list, and different exchanges where you can trade these products will classify the term ‘soft’ in different ways.
What are the Most Traded Soft Commodities?
The most traded soft commodities include sugar, coffee, and cotton. Since these are soft commodities they have high global demand because of their widespread consumption as food and textile staples.