- In the context of commodity codes, commodities include all manner of goods and services that might be bought or sold as part of a single transaction. These goods include finished products, such as telephones and automobiles. These goods may also include unfinished items comprised in the manufacture of larger products, such as electrical wires and brake pads.
- A commodity code is a number assigned to goods and services in order to categorize them by type for easy and accurate retrieval as part of a transaction. For instance, rather than entering into an invoice or computer system the entire name of a specific product type, a commodity code may be entered. In this sense, commodity codes standardize how specific products are expressed, allowing for clear communication between buyers and sellers.
- Individual commodity codes comprise five numeric digits. The first two or three digits are indicative of the commodity (product) type, and the last two digits indicate the specific item. For example, according to the U.S. Department of Commerce the commodity code for grapes is 03322. The first three digits, "033", stand for types of fruits and nuts, and the last two digits, "22", specifically indicates grapes.
- In the United States, commodity codes are regulated and published by the U.S. Department of Commerce. This agency's official name for the body of commodity codes issued is the Standard Classification of Transported Goods (SCTG).
- It is important not to confuse the the use of "commodity" in the context of commodity codes with items bought and sold in the commodities market. Commodities in the latter context, though included as part of the former, include raw and unfinished natural resources whose value intrinsically derives from their uses in nutrition and industry. Examples include iron ore, precious metals, grain and fruit crops, and coffee.
What is a Commodity?
What is a Commodity Code?
How are Commodity Codes Structured?
How are Commodity Codes Standardized?
Considerations
SHARE
