What are soft commodities?

Soft commodities are raw agricultural products that are grown rather than mined or extracted. Examples include coffee, cocoa, sugar, cotton, and orange juice. These commodities are traded globally on various exchanges and are influenced by factors such as weather, crop cycles, and geopolitical events. Soft commodities play a crucial role in the global economy, providing essential inputs for food, beverages, and textiles. Investors and businesses track soft commodity markets to manage risk and take advantage of price movements.