Soft commodity trading involves the buying and selling of commodities that are grown, in contrast to those mined from the ground. Unlike precious metals like gold, which are extracted through mining, soft commodities such as cocoa, coffee, cotton, orange juice, and raw sugar are products of agriculture, cultivated on trees or fields. Soft commodity markets have a rich history, playing a significant role in the liquidity of global futures markets.
These markets not only provide farmers with a means to hedge against natural disasters but also offer opportunities for securing long-term profits, ensuring stable production, and providing avenues for speculation. Soft commodities, as the foundation of food and clothing production, maintain a persistent demand, creating opportunities for traders to capitalise on the essential role these commodities play in global economies.