The ICC Academy has produced the latest of its comprehensive guides, this takes one through the core aspects of commodity trade finance. Commodities can be defined as being typically mass-produced goods which are sold and delivered in bulk (exceptions may be precious or rare metals). They include raw materials, agricultural products. Commodity trade finance may be defined as providing the financing to bridge the purchase of the commodity, e.g. by a trader, until the sale of the underlying commodity by the trader to, for example, a processor. It should be noted that this does not necessarily involve actual funding, but can be structured in the form of a contingent instrument, the most common of which are letters of credit.
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