Raw Material (Meaning and Explanation)

We explain what raw material is, how it is classified and why it is so important. Also, the countries that export it and examples.

What is the raw material?

Raw material is understood as all those elements extracted directly from nature in its pure or relatively pure state, and which can subsequently be transformed, through industrial processing, into final goods for consumption, energy or semi-finished goods that in turn feed other secondary industrial circuits. They are the basic input of the industrial chain, and are due to the primary sector of the productive chain.

There are numerous types and forms of raw materials, as many as there are manufacturing processes. Its obtaining mechanisms are also diverse, since some raw materials are directly within our reach and others must be searched in the depths of the earth's crust (mining), at the bottom of the seas or even must be derived or synthesized from other raw materials.

The demand for raw materials in industrial society is constant and abundant, not only for the production of consumer goods, but also to feed energy production processes, through the burning of fossil fuels or the atomic processing of minerals such as uranium. Paradoxically, The countries that produce this raw material are mostly from the third world that is, the least developed, since they must consume at a higher cost the products made by developed countries with their own raw materials.

You may be interested: Industrialization

See also: Exploitation of natural resources

Types of raw materials

Raw material - oil — Oil exists as a product of long geological processes.

Raw materials can be classified in different ways, starting with their availability on our planet. Thus, one can speak of:

Non-renewable raw material That which exists as a product of long geological or historical processes on our planet, and whose reserves are at risk of running out if the rate of consumption does not follow rational patterns. For example: oil or fossil coal.
Renewable or superabundant raw material That which is either in constant and rapid reproduction, or in such abundant levels that it is virtually impossible to exhaust them, at least in the short and medium term. For example: gaseous hydrogen or solar energy.

On the other hand, raw materials can also be classified based on their origin:

Plant origin It comes from trees, plants, seeds, fruits and natural derivatives, such as wood, rubber, cork, etc.
animal origin They form or were part of the life of an animal, that is, its bodies (wool, leather, fur, etc.) or its vital processes (milk, pearls, silk, etc.).
Mineral origin Matter from terrestrial deposits, or from amalgams and mixtures of metals and other elements, such as iron, copper, gold, silver, etc.
Fossil origin This is organic waste subjected to millennia-old sedimentation and fossilization processes, resulting in hydrocarbons of high chemical and energy value.
Universal origin Elements created together with the planet, present in ordinary liquid or gaseous substances, such as water or air.
Synthetic origin Materials that do not exist in nature and must be created by humans, such as certain isotopes of Uranium.

You may be interested: Administrative Address

Importance of raw material

The raw material It is considered the basis of the human industrial process that is, the starting point of any productive or manufacturing chain. Without it there would be no elements to transform and combine through various processes, in order to obtain more elaborate ones with added value. For this reason, the price of raw materials affects the final prices of the manufactured products, and operational factors such as their abundance, their difficulty of extraction or their difficulty of transformation intervene.

Raw material exporting countries

The large raw material producing countries in the world of the 21st century are, generally, countries from the so-called Third World, especially from Asia, Africa and South America where mineral and biological resources to export abound. This is what happens with mining and oil and hydrocarbon exporting countries, abundant in the Middle East and the American continent (Saudi Arabia, United Arab Emirates, Mexico, Venezuela, Bolivia).

The great economic paradox of these countries lies in the fact that they export raw materials to industrialized countries, with which they manufacture consumer objects, and then they consume the manufactured goods again at a higher price per unit thus cultivating an importing and dependent economy. On the other hand, the decrease in certain resources or the growing ecological damage that the extraction of raw materials entails, makes raw material prices more expensive and therefore markets experience instabilities that, in turn, have an impact on relations. policies between raw material exporting countries and highly industrialized countries.

Raw material in accounting

In accounting sciences, any type of material is called raw material. essential input to start a productive or manufacturing chain. In this sense, accounting administration is concerned with various aspects:

The purchase prices Since they are the base payment so that the industrial or productive process can be perpetuated over time. Without purchasing raw materials, there is no business future.
The inventories That is, the raw material saved or stored to face cases of delay, shortage, etc. and the costs that said storage includes.
The quality Since better quality raw materials guarantee final products of a similar quality, and therefore a higher price in the market.

You may be interested: Asian Production Mode

Pollution

One of the great drawbacks of hoarding raw materials has to do with pollution and ecological damage, which seem to be inevitable consequences of activities such as mining, logging, fishing or oil exploitation. This sustained damage to the ecosystem, added to that produced by secondary industrial transformation activities, has left its mark on the world in the form of destruction of ecosystems, impoverishment of biological diversity and deterioration of human health.