Social Sciences

GEOGRAPHY Learner's Book Grade 6 Term 2

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Trade
Trade is the voluntary exchange of goods and services by people. It is the exchange of one
thing for another. Trading has been around for centuries. Voluntary trade means that people
make a decision to exchange goods or services without being forced to do so and of their own
free will. People trade in order to benefit from it. When people believe they can no longer reap
the benefits of trading, then trading comes to an end. Economically, people judge their trade
success by weighing the benefits of the purchase against the costs of their trade.
Long ago, people exchanged goods amongst east other for new and interesting commodities
in a barter system without using money. They traded raw materials as well as manufactured
materials. Some examples were spices, gold and silk.
Trade would not exist if humans had equal qualities because each person would have the
same needs and circumstances. It is because humans are unequal with different needs and
circumstances that trade happens. Trade is inclined to reduce inequality and to ease the
consequences of the different circumstances in which humans live.
In this module you will:
Understand why people trade
What people trade
Understand resources and their values
Understand fair trading
People trade with each other to find goods or services which they want and which they cannot
produce or get for themselves. Trade is one of the four ways generally accepted as lawful, that
people can purchase goods; the other three being producing it personally, by receiving a gift
and by inheritance.
Why people trade
Trade is made for the mutual benefit of
parties. The outcome of a trade is that
everyone involved is better off. Most
economists accept that trade is the seal
of prosperity.
Trade as buying and selling goods for money
Money has made trading much simpler and effective compared to earlier practices of bartering.
Trade can be described as a financial transaction or barter. A network that allows trade is called
a market. Modern traders generally trade with money by buying, selling or earning. Money can
be credit, paper and non-physical money. Trade between two buyers is called bilateral trade,
while trade between more than two buyers is called multilateral trade.
Internal trade is trade that is conducted within a country. It is the involvement of wholesale and
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retail trade. Wholesale trade involves buying in large quantities from producers or manufacturers
and selling to retailers. A wholesaler is the middle man between the manufacturer and retailer.
Retail trade involves buying from wholesalers to sell to consumers. A retailer is the last link in
the chain of distribution.
Buying and selling between two or more countries is called International, Foreign Trade.
International Trade is the exchange of capital goods and services across geographical/
international borders. International trade represents a major share of a countrys GDP (Gross
Domestic Product) and can be sub-divided into three categories:
Export Trade: Sale of goods and service from home country to a foreign country; when a
trader sells his goods to a trader in another country. For example: a trader from South Africa
sells his goods to a trader in China.
Import Trade: Purchase of goods and service from a foreign country to home country; when
a trader buys goods from a trader in another country. For example: a trader from South
Africa buys goods from a trader in England.
Entrepot Trade: This is when goods are imported from one country to home country,
processed and then re-exported to another country. For example: an Indian trader (from
India) imports spare parts from a Chinese trader (from China), then converts them into
finished goods and then exports the spare parts to an American trader (in USA).
Activity 1: Reasons for Import and Export
List the reasons in your class workbook, why a country would import goods or services and
export goods or services.
Reasons for Importing
Reasons for Exporting
Total: (10)
Activity 2: Essay
Write an essay of no more than 200 words explaining how trade has changed from the early
1800s until now.
Total (20)
Foreign trade
Since the end of apartheid, foreign trade in South Africa has increased. International trading
partners of South Africa include other African Countries, the European Union, United States,
China and Japan. Exports are mainly mining and agriculture , fore example maize, diamonds,
fruit, gold, metals, minerals, sugar, and wool. Imports include transportation equipment and
machinery, chemicals, manufactured goods and petroleum.
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 Activity 3: Trade Activity 5: PowerPoint Presentation
Read the questions and write the answers in your class workbook. Create a PowerPoint Presentation highlighting South Africas top 5 imports (measured in
gross expenditure) and top 5 exports (measured in gross income). Include the top 5 export
1. Import trade means the___________________of goods from one country to another.
destinations and the top 5 countries from which South Africa imports products.
2. Entrepot means the _________________________of goods.
Total: (20)
3. Foreign trade is also referred to ________________________trade.
4. Voluntary trade means ______________________________________.
5. The name referred to as a network that allows trade. ____________________
Skills
6. Trade between two buyers is called _________________________________. A skill is defined as the ability, using knowledge, practise and aptitude to do something well.
Skills have three key features:
7. What are the three categories of international trade called? ________________________.
Productive: using skill is productive of value.
8. Write the full meaning of GDP ________________________________________.
Expandable: skills are enhanced by training and development.
9. Name the system that was used for trading long ago _______________________.
Social: skills are socially determined.
10. Why do people trade? _______________________________________________.
Total: (10)
Services
A service is the process of providing customer satisfaction with a product or service. This can be
What people trade done in the form of direct or indirect contact. Service is fundamental to service management.
Service allows both the customer and the service provider what to and what not to expect from
Raw materials are the primary products or basic materials from which a product is made a service. Services that are clearly defined, help customers to understand the service offering,
and sold. Raw materials are factors of production along with labour and capital and are very including what the service provides, includes, eligibility, limitations, costs, requests and how
important to the production process. A country that has lots of natural resources does not need to get assistance. A well-defined service also identifies internal processes necessary to provide
to import many raw materials and has the opportunity to export their raw materials to other and support the service.
countries. Raw materials are often natural resources such as oil, iron and wood. Before being
used in the manufacturing process, raw materials are often changed to be used in different
processes. Raw materials are also referred to as commodities, which are bought and sold on
commodities exchanges around the world. Manufactured goods are goods that have been Activity: 6a Good Service and Bad Service
processed and are the secondary product to the primary (raw material) product.
Look at the list of words below and tabulate in your class workbook, which words suggest
tradestats.thedti.gov.za good service and which words suggest bad service. Add five more descriptive words for each
service.
Total: (10)
Activity 4: Raw materials sincere inconsiderate surly understanding smart
Look at the examples of raw materials below. List two secondary products each raw material reluctant indifferent helpful positive welcoming
can be processed/manufactured into. Record your answers in your class workbook. distant cold abrupt polite rude

1. Wood 2. Crude oil

Activity 6b: Paragraph writing
3. Gold 4. Glass
Write a colourful paragraph in your class workbook explaining the reasons why is it important
5. Iron to an organisation that its customers return and / or speak positively about their experience.
Total: (10) Total: (20)

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 were first tasted by the French after the royal marriage of King Louis XIII to the Spanish Princess
Activity 7: Mind Map Anne of Austria in 1615.
Create a mind map in your class workbook using the topics below to expand on the In 1650, chocolate beverages appeared in England at the same time that tea arrived from
information provided. The mind map should include other key words, associations, images, China and coffee from the Middle East. The consumption of the drink was only a privilege for
symbols or codes to make it visually interesting and informative. the upper classes and for soldiers during battle. In 1659 the first chocolate-confection maker
My skills My values My Interests My Strengths Possibilities opened in Paris. In 1720, Italian chocolate-makers received prizes in recognition of the quality
of their products.
Total: (20)
Chocolate developed quickly across Europe and around the world. Spain, the first exporter of
chocolate, opened the first chocolate factory in 1780, followed shortly thereafter by Germany
Resources and their value and Switzerland. The cacao tree was introduced into West Africa by the Europeans and a new
cocoa empire emerged on African soil. New chocolate products were made as it became more
Natural resources such as oil, gas, minerals, metals and timber can contribute to job creation,
popular, including chocolate with dried fruits, liqueurs, nuts, spreads, frostings, pastes, and
government revenues and long-term economic growth for a country. Use of these resources
many others.
determine their importance to a country as well as the supply. If there is a small supply of a
resource, it is given a greater value. The value of a resource can also change over time. For
example, before the development of nuclear energy, uranium had few uses. Today it has more DID YOU KNOW?
value as it is needed for the process of nuclear fission. The natural distribution of resources
The cocoa bean was commonly used as a currency throughout Mesoamerica;
greatly influences how countries relate to one another. Countries trade with each other in order
to get the resources they need. Cocoa powder was originally produced by the Dutch in 1828;
The chocolate bar originated in Great Britain in 1830;
Activity 8: Research and oral presentation In 1830, Daniel Peter and Henri Nestl from Switzerland, developed milk chocolate and
during the same period, Rodolphe Lindt developed the chocolate fondant (fondue).
Choose one of the energy resources below and research its economic value and
environmental impact. Use this research to present an oral to the class. In 1847 in England, solid chocolate is offered to the general public for the first time by the
English company Fry and Sons;
Coal, oil, gas, hydro-power, nuclear power.
Europeans brought the first cocoa trees to Africa;
Total: (20) The cacao plant was given its botanical name by Swedish natural scientist Carl Linnaeus,
who called it Theobroma cacao meaning food of the gods;
The origin of chocolate Since the start of the 20th century, Africa has become the biggest cocoa producer;

Historians believe that the Olmec (1500- Chocolate has changed from a delicacy reserved only for royals, to a widely available treat
400 BC) were the first humans to eat for many!
chocolate by crushing cocoa beans (also
known as cacao) and mixing them with
water and spices to drink. Activity 9: Case Study
It was in 1502 when Columbus Ghana has been a massive producer of cocoa beans for the world market and this has been
discovered cocoa beans during a the backbone of Ghanas economy for a long time. Research the factors that affect cocoa
stopover in Nicaragua. The true value farmers in Ghana.
of the cocoa bean was not known until Total: (10)
Hernn Corts drank it with the Aztec
emperor. Until then, its ultimate worth
was not yet recognised.
From cocoa to chocolate
After the collapse of the Aztec civilization, Corts grew a profitable trade with Spain.
Cocoa is grown in plantations in West Africa, Asia and South and Central America with the
The first shipment of cocoa beans arrived on the Iberian Peninsula from New Spain in 1585, largest producing countries being Ghana, Indonesia and the Ivory Coast. Africa is the biggest
which started the trading of cocoa and the founding of the first chocolate shops. During the cocoa supplier providing 75% of the worlds crop. For many, cocoa cultivation represents an
17th century, cocoa began arriving in other ports throughout Europe. Chocolate beverages important source of income.

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 The cocoa bean comes from the takes a remarkable transformation once
fatty bean of Theobroma Cacao tree, it has been mined, to reaching the hands
where cocoa solids and cocoa butter of the consumer as jewellery. During
is extracted to form the chocolate this transformation, it is changed from
base. The cocoa tree starts to bear unprocessed ore, to a valuable metal
fruit when it is 3-4 years old and which is recognised for its intrinsic value
bears two harvests per year. Very few and cultural significance. Over the last
flowers are fertilized and developed decade, the value of gold has increased
into cocoa pods. Each tree yields massively.
approximately 20-30 pods a year
The supply chain for gold has four distinct
and a cocoa pod normally contains
phases: mining, extraction & refining,
between 20-40 seeds.
manufacturing and retailing. As pure gold
After approximately six months when the cocoa pods are fully grown, they are then harvested. is soft, it is usually mixed with alloys to make it harder for the jewellery making process.
The pods are collected in baskets and the seeds removed from the pods and left to ferment and
China is at present, the fastest-growing market for gold jewellery in the world but the United
dry. Fermentation is important as this process naturally removes any fruit pulp that sticks to the
States is one of the worlds most significant consumer markets. South Africa is the worlds 5th
beans.
largest producer of gold. Gold mining in South Africa has been the biggest driving force behind
After drying, the beans are graded. the countrys participation in the global economy.
The manufacturing process:
The cocoa beans are cleaned and removed of any stones and sand leaving only the kernel
behind;
Activity 10: Flow Diagram
The cocoa nibs are roasted and put into grinders to be ground coarsely; Gold to Jewellery process
They are then ground to fine cocoa liquor using heat to melt the cocoa butter present in the Research and create a flow diagram that explains the process form ore to store .
liquor; Total: (10)
This now becomes a liquid when the liquor melts and the cocoa liquor is now ready to use as
an ingredient of chocolate;
It can also be processed into cocoa powder and cocoa butter. Activity 11: Case Study
What are the raw materials used to make chocolate? Compile a case study on one operating mine in South Africa. Research the estimated value
Cocoa liquor, cocoa butter, sugar, powdered milk and vanilla of gold it produces as well as the impacts of mining on the environment.
are the raw materials which make all the different types of
chocolate;
Total: (30)
Dark chocolate is made with cocoa liquor, cocoa butter and
sugar;
Milk chocolate is made by adding milk powder;
White chocolate does not include cocoa liquor;
Concepts of fair and unfair trade
Vanilla is added to all types of chocolate to enhance the taste. Fair trade is an approach to business and development to support the practice of fair trade and
transparency during international trade.
From gold to jewellery It is a system that supports fair labour practice in developing countries who lack economic
opportunity and markets in which to sell their goods. It is an open, supportive and profound
By the time of recorded history, gold was considered sacred and a symbol of wealth and social association between buyers and sellers that ensures the principles of fair trade remains at the fore.
rank and since then, its relationship with human society has grown. Gold mining remains a key
Unfair trade policies prolong inequality. The term Unfair Trade Practice broadly refers to any
global industry as gold is a backbone of economies worldwide.
deceptive or corrupt trade practice of products or services and includes unfair competition,
Gold is malleable (soft) which makes it easy to work with and it is resistant to corrosion. It false advertising, misleading information, fraud, prejudice and criticism.

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In South Africa, the Consumer Affairs (Unfair Business Practices) Act, 1988 defines unfair
business practice to mean any business practice which, directly or indirectly, has or is likely to
have the effect of:
Harming the relations between businesses and consumers;
Unreasonably prejudicing any consumer;
Deceiving any consumer;
Unfairly affecting any consumer.

Activity 12: Case Study

Read the story and answer the questions that follow in your class workbook.
Jacob earns a living by growing and harvesting cocoa beans on his smallholding. It is hard
work because cocoa trees only bear two harvests a year. He only manages to collect 100kg of
beans after each harvest, which he sells to the trading company once they have dried. Jacob
earns R100.00 for each 100kg he sells. This money has to last him 6 months until he can sell
the next harvest. Jacob has to feed his family with this money as he is the only breadwinner.
The trader then sells Jacobs harvest to the producer for R1000.00, making a massive profit
out of trading.
What is unfair about this story? Validate your answer with facts about unfair trade. (4)
Design a fair trade logo for South African products in recognition of fair trade. (6)
Total: (10)

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