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Raw Materials from 3rd World Countries vs. Finished Products from 1st World Countries


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  Post Number #1  
Old 19th January 2011, 11:37 AM
Ka Pilo

 
 
Total Posts: 610
Question Raw Materials from 3rd World Countries vs. Finished Products from 1st World Countries

Why is it that the raw materials from Third World countries are cheap when bought by First World countries? And why is it that finished products sold by First World countries are very expensive?

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  Post Number #2  
Old 19th January 2011, 11:47 AM
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Stijloor

 
 
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Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Quote:
In Reply to Parent Post by Ka Pilo View Post

Why is it that the raw materials from Third World countries are cheap when bought by First World countries? And why is it that finished products sold by First World countries are very expensive?
What do YOU think?

Stijloor.
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  Post Number #3  
Old 19th January 2011, 11:57 AM
Ka Pilo

 
 
Total Posts: 610
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Quote:
In Reply to Parent Post by Stijloor View Post

What do YOU think?

Stijloor.
Because of the processing cost? Or the value of money?
  Post Number #4  
Old 19th January 2011, 12:03 PM
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Randy

 
 
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Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Quote:
In Reply to Parent Post by Ka Pilo View Post

Because of the processing cost? Or the value of money?
Pretty good answer.

On top of what you think there is less value in dirt (raw material) than there is in finished product

The price paid for raw materials is based on what is offered and what is taken for them.
Thanks to Randy for your informative Post and/or Attachment!
  Post Number #5  
Old 19th January 2011, 12:12 PM
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Kevin H

 
 
Total Posts: 489
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Possibly slightly off topic, but I believe relevant. I think we may be heading into an era where secure access to raw materials may be critical - for example, rare earth elements, which currently are supplied by China.

Also, I attended the annual AIST meeting in Pittsburgh last May, during the round table discussion one of the topics was raw materials - all the executives of the steel companies indicated that they had, were taking, or were increasing their stake in raw material suppliers to ensure that they had adequate supplies for their business. They also indicated at that time (May 2010) that they were making more money from raw materials than from finished products.
  Post Number #6  
Old 19th January 2011, 12:15 PM
Randy's Avatar
Randy

 
 
Total Posts: 8,286
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Just take a quick look at these links to help understand

Wikipedia reference-linkSupply_and_demand

Wikipedia reference-linkSupply-side_economics

Wikipedia reference-linkDemand_side_economics

Wikipedia reference-linkSupply_(economics)
  Post Number #7  
Old 19th January 2011, 12:22 PM
sridharafep's Avatar
sridharafep

 
 
Total Posts: 180
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Who are all under Third World countries?

Who are all under second world Countries?

Who are all first world countries?

Why?
  Post Number #8  
Old 19th January 2011, 12:29 PM
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Marc

 
 
Total Posts: 24,561
I Say... Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Quote:
In Reply to Parent Post by Randy View Post

Just take a quick look at these links to help understand

Wikipedia reference-linkSupply_and_demand

Wikipedia reference-linkSupply-side_economics

Wikipedia reference-linkDemand_side_economics

Wikipedia reference-linkSupply_(economics)
Simplistic in that the elephant in the room is cost of labor in any given country, in addition to the location of where raw materials are most abundant, not to mention available technology in any given country.

But the Chicago school would agree with the basics you cite.

A good read: Adam Smith's Wikipedia reference-linkThe_Wealth_of_Nations
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