Can Commodities Trading Impact Defence and Security?

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Trading and investments affect a country’s economy and other sectors. In particular, commodities trading has become increasingly popular in the past years. One of the commodities rising in significance is lithium. Recently, more traders are trading lithium after prices soared and demands are predicted to keep growing. Many companies focused on other commodities, such as copper and coal, have shifted towards the lithium market.

So, how does this impact defence and security? One of the key uses of lithium today is as a significant component in most electric vehicle batteries. As many countries begin transitioning military vehicles to electric power, access to lithium reserves and a stable supply chain are crucial to maintaining mobility and operational capabilities for the military.

Of course, lithium trading is only one of many commodities being traded by investors and traders. Below, we’ll take a closer look at what commodities trading is and whether or not it can significantly impact defence and security:

What is commodity trading?

To understand how commodities trading can impact defence and security, it’s essential to understand why more traders today are looking at commodities as a viable means of investment. Compared to traditional financial instruments like stocks and foreign currencies, commodities represent physical goods and resources such as gold, oil, wheat, or lithium, making them tangible assets.

Thanks to advances in technology, people can use various online trading platforms to trade commodities easily. These platforms provide access to the dynamic world commodity market, allowing traders to diversify their investment portfolio by trading commodities such as precious metals and energies.

As with online stock or forex trading, commodity prices are prone to fluctuations. Fortunately, these platforms also provide security features to help protect investments, such as stop-out protection to help strengthen trading positions against market volatility.

Over time, commodities also vary in popularity. Recently, the shift towards renewable energy in South Africa indicates trader preference for renewable energy trading. This helps support the local renewable energy market, which sees numerous applications from field hospitals to military field camps.

So, can commodities trading impact defence and security?

As explained above, commodities trading can indirectly impact a country’s economic participation and stability, as well as supply chains for commodities such as energy, food, and other critical materials. While trading commodities won’t directly affect a nation’s defence or security, these economic factors can still have an effect in the long term.

Aside from economic stability and revenue generation, the increase in Africa’s commodities trading can impact local resources and supply chain. For example, Africa’s mining industry is crucial for materials used in batteries, solar panels, and other green tech that can boost the transition from fossil fuels to renewables. Through continued investments in commodities from the mining industry, we may see more improvements in defence and security operations and mobility.

Similarly, the region’s agricultural sector is crucial for economic development and transformation. By investing in improved technologies, skills, and provision systems in Africa’s agriculture sector, we can see accelerated growth and get more youth involved without compromising digital innovation and the development of smart cities.

Continued investment in the agriculture sector points towards better food security, which is crucial for maintaining the health, well-being, and overall morale of a country’s population, which can have direct implications for national security. Similarly, the region can benefit from added biosecurity by protecting agricultural assets from pests, diseases, and bioterrorism, which are often overlooked aspects of national security.

So, can commodities trading impact defence and security? The answer is yes, albeit not directly. The increasingly popular practice of commodities trading is beneficial not only for citizens to grow their personal wealth but also for boosting a nation’s economic stability and revenue growth. In turn, this economic development can be used to fund and improve defence and security initiatives in the region, such as military spending or border protection.