Global Market

  

Global market can be defined as the market of the world where the countries of the world act as entities trading in goods and services and where the prices of the commodities are influenced by the forces of global supply and demand . Global markets have emerged as fallout of globalization where we face an increasingly integrated world as a result of rapid and free movements of goods and services across countries. The global market is now a potpourri of goods and services originating from different corners of the globe. The key factor for globalization, it can be said, is the diffusion of technology and technological advancements in most of the countries. The spread of technology is not limited to the technical know-how any more as resources can also be obtained over the internet due to which the world is getting smaller by the day. Diffusion of technology and improvement of techniques of production in most of the countries have made many goods cheaper in the home country which, if produced on a mass scale, translates itself into the home country reaping the advantages of the economies of scale. This will further lead to the concept of comparative advantage when trading takes place between different countries of the world.

Some of the popular global markets would include :

Food market – this does not pertain to the fundamentals of international trade as the global food industry is continually changing with the emergence of new suppliers, retailers and manufacturers who adjust to meet the needs of the consumers who consistently demand better quality products. Expansion of foreign markets has mainly emerged as the markets in the developing countries are coming under its fold which has spurted the growth of global food manufacturers. This has however had an adverse impact on many small-scale individual retailers of food products in the domestic market who find it difficult to compete with the global brands. The global market for raw food grains whose prices are also very fluctuating in nature is considerably affected by the barriers to trade which hinder the free movement of these commodities across countries.

Crude oil market – While the demand for this product is heavily biased, the suppliers of crude oil are restricted to only a few countries such as Venezuela, Nigeria, Sudan, and countries in the Middle-Eastern and Gulf region. The push and pull in this market severely affects production in many countries of the world as crude oil and petroleum which is derived from it is a primary input in industrial production and generation of power.

Labor Market – This is a market where significant effect of the forces of globalization has been felt with many developed nations outsourcing their work to the developing countries due to the abundance of cheap labor in these economies. As a result, labor wages have become volatile in nature due to the free movement of this factor as has happened in case of all other international prices.

Other global markets which play a significant role is the market for industrial products whose prices also fluctuate very much due to the push and pulls for these commodities. With the advent of the South –East Asian economies known as “Tiger Economies,†such as China, South Korea and Taiwan onto the global stage which produce cheaper and better quality products than many of their counterparts in the developed world, international prices of electronic gadgets such as computers, I-Pods and laptops have fallen considerably.