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Commodities: A Resource Guide

Commodities Classification

[Exchange floor of the Chicago Board of Trade]. c1920. Library of Congress Prints and Photographs Division.

Primary commodities are the output from the primary sector, whose activities supply unprocessed raw materials of agricultural (includes hunting, forestry, and fishing) and mineral origin, along with fuels, electricity and potable water, for use by other sectors of the economy. However, the raw materials output of the primary sector is only part of what is generally meant by primary commodities. Many commodities have had their value increased, for example through the activities of refiners, pulp mills or smelters. There is no general classification of commodities; however there are systems developed for specific purposes, such as customs, that are useful when researching trade or investment in commodities.

The International Standard Industrial Classification of All Economic Activities (ISIC) (PDF, 1.08MB) produced by the UN Statistical Office is widely used to classify economic activity. In general, it and similar national accounts statistics are of limited use in determining value or volume of commodity production, because they too narrowly define commodity production as the output of the primary sector.

The Standard International Trade Classification (SITC) is more useful in defining commodities and organizing them within groups that generally contain their close substitutes. Sectors numbered 0 through 9 compose its classification and these are further divided into 67 divisions, 262 groups, 1,023 subgroups, and 2,970 basic headings or items. For example, Section 3 includes all mineral fuels, lubricants and related minerals while 343.1 includes only liquefied natural gas.

For researching international trade data, the Harmonized Commodity Description and Coding System (HS) is an appropriate classification scheme. The Harmonized System of tariff nomenclature is an internationally standardized system of names and numbers for classifying traded products that is maintained by the World Customs Organization (WCO).  Its online HS database is now available by subscription to its WCO Trade Tools platform. The HS assigns specific six-digit codes for varying classifications and commodities, while individual countries are allowed to add to the basic code; the United States uses a 10-digit code to classify products for export known as the Schedule B number. The Schedule B number is administered by the U.S. Census Bureau's Foreign Trade Division.

The Global Industry Classification Standard (GICS) can be useful for investment research in commodities; however, only companies that have issued equity securities are eligible for GICS classification. GICS is a demand-oriented, rather than product-oriented, classification that categorizes companies based on how individuals and companies purchase their products and services. Developed in 1999 by MSCI (Morgan Stanley Capital International) and S&P Dow Jones for the global financial community, GICS Methodology & Structure now fall under the overall supervision of the GICS Operations Committee. The GICS structure currently has four levels of detail: 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries. Of particular interest for the commodities researcher are the materials and energy sectors and some sub-industries (e.g. Agricultural Products within the Consumer Staples sector).

Exchange-traded commodities are more simply categorized as belonging to one of three sectors: agriculture, energy, or metals.

The following materials link to fuller bibliographic information in the Library of Congress Online Catalog. Links to digital content are provided when available.

Online Resources

The following provide information about various commodity and product classification systems.