Definition of a "Commodity"

Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity. The article should be movable of value, something which is bought or sold and which is produced or used as the subject or barter or sale. In short commodity includes all kinds of goods. Forward Contracts (Regulation) Act (FCRA), 1952 defines “goods” as “every kind of movable property other than actionable claims, money and securities”.

In current situation, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for commodity trading recognized under the FCRA. The national commodity exchanges, recognized by the Central Government, permits commodities which include precious (gold and silver) and non-ferrous metals; cereals and pulses; ginned and un-ginned cotton; oilseeds, oils and oilcakes; raw jute and jute goods; sugar and gur; potatoes and onions; coffee and tea; rubber and spices. Etc.

Different dictionary defines “commodity” as under:

Any item that can be bought and sold. Taken to refer to Exchange – traded items including sugar, wheat, soya beans, coffee and tin.

That which affords convenience, advantage, or profit, especially in commerce, including everything movable that is bought and sold (except animals), -- goods, wares, merchandise, produce of land and manufactures, etc.

In the world of business, a commodity is an undifferenciated product whose market value arises from the owner’s right to sell rather than to use. Example commodities from the financial world include oil (sold by the barrel), wheat, bulk chemicals such as sufuric acid and even pork-bellies.

Definition by Marxian political economy:

A commodity has a value (i.e., has been produced by human labour), is a use value, and has exchange value. Marxian values are determined by the amount of work an average worker using average tools would require to produce such a good. As such, a commodity directly expresses human labour and within capitalism proletarian servitude. Marxixts see commodities as a central element of the exploitation of labour within capitalism.