Natural Resources That Affects Trade

Natural Resources That Affects Trade

Natural Resources

Some business rely on the natural resources of a country. Stuff like oil, fruits, stones or natural minerals are used as a raw material to a product that a company manufactures. So how does it affect it? The production of merchandises can depend on the natural material itself. For example, if a farm did not harvest enough pineapple, there wouldn’t be enough stocks for pineapple juices. The price might rice in the process: a simple supply and demand situation.

Natural Resources

Geographical Location

Every country on earth is vast and diverse. The geographical composition of each country differs from one another like from every biome to every sea that a country holds. Again, there are a lot of factors here alone. First is the narrowness which holds the range of a country, then the weather that can affect the growth of natural resources and a possible factor of the inhabitants of the location that can affect everything.

Human Workforce

As mentioned earlier, the inhabitants alone can be a factor but the actions matter too. What the people do to the resources can play a part on certain products than can put a positive or negative effect on a company’s performance. Example is a fashion line which is dependent of animal skin is halted to manufacture such products or do such heinous act due to some certain law that prohibits killing animals for fashion.

Economic Performance

This can be under the:

Inflation – If a state’s inflation frequency upsurges comparative to the nations with which it trades, its contemporary justification will be anticipated to reduce, supplementary effects being equivalent.

Political Laws – Laws regarding international interactions, exports and imports can play on a country’s performance.

Profits – A company’s overall performance can play a major role in trading. Let’s say a company is doing well and this will attract foreign investors around and the country will do well if so.

Imports and Exports – Performance on international supply and demand always have a major effect on the trading market. If the market’s demand on a company’s product is high, the company’s performance will climb up.

Exchange Rates – This is more on the forex trade where a trader depends on a country’s currency.

International Affiliates – Buyers and firms in that country will most prospectively have more acquisitions to new properties ultramarine which is due to greatly confined inflation, while the nation’s distributes to further countries will weaken.

Read also: The Impact of Stock Market Investing to the Economy.

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