commodity trade flows

How to spot commodity flows?

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Commodity flows ?

 

Recently I had a couple of questions about trade flows and commodity flows.

How do you know which country export commodities? which country import?

Those kinds of question are easily answered! 

I’m not an analyst but I can give you the right path to follow in order to have a global view.

Be the HS code master

 

First, you need to know under which HS code the commodity is classified. The Harmonized System code is an international nomenclature used to classified each product.

Check Wikipedia for more info about the HS code

I encourage you to use the Swiss custom website to find under which HS code your product could be shipped.

So, let’s illustrate how I would do it with “Sugar”

1st go to the xtares.admin.ch website

 

Once you found the right product, you can choose the level of granularity that you want. As you can see above we have

  • 1701 for raw sugar

  • 17011200 for beet sugar

  • 17011300 for cane sugar

Data Collection 

 

To collect the data, I like to use the site www.trademap.org. It complies data from the UN comtrade.

You will be able to see the quantity/value declared for any given HS code.

It’s important to take those numbers with precaution. As in some countries, the reporting is not as accurate as it should be… But it still gives a good idea on the macro level.

Let's carry on with our sugar on trademap.org:

Tadam ! and hop ! You have the data !

 

Deeper analyse

 

What we have just seen is really basic. Now if you don’t want macro information but create a real model, you need to follow what the best trading companies do. It’s going micro et scaling up.

Basically, you take the pocket of demand in each country and aggregated them on a worldwide model. It’s a gigantesque task, but give a real hedge once applied.  We deconstruct one of this model on our module”.

 

As always, any questions ! feel free to ask !

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Damien W.

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