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What are Raw Materials?

Raw Materials

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Raw Materials

Raw materials are the basic, unprocessed inputs used in the production of goods. They are natural or unaltered materials that are extracted or harvested from the earth and are used in manufacturing or processing to produce finished products. The nature of raw materials can vary widely, and they can be solid, liquid, or gaseous.

Examples of raw materials include:

  • Agricultural Products: These include crops like wheat, rice, and corn, which can be processed to produce food products. Cotton, an agricultural product, is used to manufacture textiles.
  • Minerals: Mined substances like gold, iron ore, and coal are examples. Gold can be used for jewelry, iron ore is processed to produce steel, and coal can be used for energy production.
  • Forestry Products: Trees harvested can be processed into lumber for construction, paper, or furniture.
  • Oil and Gas: Crude oil can be refined into various products like gasoline, diesel, and petrochemicals. Natural gas, on the other hand, is used for heating, electricity generation, and also as a raw material in certain chemical industries.
  • Water: Used in a variety of industries, including beverage production, and as a key ingredient in many manufacturing processes.
  • Air: It can be processed to separate out specific gases, like oxygen for medical or industrial use.

The cost of raw materials is a significant factor in the production process. If the price of a raw material rises, it can increase the cost of production, potentially affecting the price of the finished product. On the other hand, if the price of the raw material drops, it can decrease the production cost, which might lead to reduced prices for consumers or higher profit margins for producers.

Raw materials also play a crucial role in international trade, with countries exporting raw materials they have in abundance and importing those they lack or need more of.

Example of Raw Materials

Let’s look at a real-world example involving chocolate production.


Raw Materials for Chocolate Production:

  • Cocoa Beans: The primary raw material for making chocolate. They are harvested from the cacao tree’s pods.
  • Sugar: Used to sweeten the chocolate.
  • Milk: Used in the production of milk chocolate.

Production Process:

  • Harvesting: Cocoa beans are harvested from cacao tree pods, primarily in countries located near the Equator such as Côte d’Ivoire, Ghana, and Indonesia.
  • Fermentation: Once harvested, the beans undergo fermentation, a process that helps develop the beans’ flavor.
  • Drying: Post-fermentation, the beans are dried under the sun.
  • Roasting: The dried beans are then roasted at a chocolate production facility. This step helps in bringing out the chocolate flavor.
  • Grinding: Post-roasting, the beans are crushed and ground to produce a liquid called chocolate liquor. Despite its name, chocolate liquor doesn’t contain alcohol.
  • Mixing: Depending on the type of chocolate being produced (dark, milk, or white), various ingredients, including sugar, milk, or additional cocoa butter, are mixed with the chocolate liquor.
  • Tempering and Molding: The chocolate is then tempered (a process of cooling and heating) to stabilize the fat molecules. Once tempered, it’s poured into molds to give it the desired shape.
  • Cooling: The molded chocolate is cooled and solidified.

End Product: Delicious chocolate bars ready for consumption!


In this example, cocoa beans, sugar, and milk are the essential raw materials. The availability, quality, and price of these raw materials directly influence the quality, taste, and cost of the final chocolate product. If there’s a shortage of cocoa beans due to poor harvests, it could lead to an increase in the price of chocolate. On the other hand, if there’s an abundance of high-quality beans, consumers might get better-tasting chocolate at a more affordable price.

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