Raw materials:

These are industrial goods that become part of another physical product. They are not processed and they include: natural resources-e.g. minerals, products such as wheat, cotton, coffee, tobacco, fruits, vegetables, livestock or animal products like eggs and milk.

Features

• They are limited in supply and cannot be substantially increased
• A few large-scale producers are involved
• Products are highly standardised and graded
• They are bulky and have low unit value
• Their location (where they are situated) is sometimes far away from the location of the industrial user
• In agriculture, raw materials are supplied by many small producers located far away from the markets
• Supply in agricultural products used as raw materials is controlled by people, however, it cannot be increased or decreased quickly.
• Agricultural products are perishable and not uniformly throughout the year.