Corn is generally considered a strategic product.
A strategic product is a product considered to be of paramount importance to a nation’s economy, usually to the point that if open trade in the product is disrupted in any way, the economy will suffer severely. Commodities generally refer to raw materials or agricultural products that can be bought and sold as an investment, as well as for continued consumption. Commodities of this type are often widely used, and active trade in these products can sustain a nation’s economy. If a product that actually contributes a great deal to a nation’s economic stability suddenly becomes unavailable, the results can be far-reaching.
Determining what constitutes a strategic asset is not always easy. While there is general agreement on some commodities with strategic status, such as oil, corn, and gold, there may be debate on other products, such as the fertilizers used to grow corn or other alloys that are sometimes used in conjunction with gold. . It is also important to note that while some products may be very important to the economy of one country, they may have minimal impact on the economy of another country.
The identification of any strategic commodity within a given environment is based on how crucial open trade in that commodity is to the well-being of the economy. If the supply of this commodity were suddenly severely restricted, it could benefit some, but overall it could have disastrous results for the majority of consumers who depend on products made from this commodity. At the same time, a sudden glut of the same commodity on the market can result in lower prices for related goods, something that consumers would appreciate but not necessarily welcome investors, who would see their earnings per unit significantly reduced.
Many countries control a list of strategic commodities that are traded within their borders. Monitoring involves not only being aware of what is happening with these commodities now, but also what is likely to happen in terms of availability in the future. For example, if the strategic commodity maize is currently trading at equitable levels, but there is a good chance that supply will be reduced in the next period due to adverse weather conditions or a natural disaster, governments can start taking action now. to help minimize the impact of this reduction. This would help minimize the impact of the downturn on the economy, hopefully long enough to replenish a substantial supply of the strategic product at a later date.