Key Characteristics of Physical Commodities

John is an investment analyst who has recently been exploring the potential of investing in physical commodities. He understands that commodities can be categorized into different types, including agricultural products, metals, and energy resources. John is particularly interested in how physical commodities are valued and the factors influencing their market prices.

Based on his research, he learns that certain physical commodities have characteristics that significantly impact their investment viability compared to paper commodities or derivatives. As he prepares to present his findings to his investment team, he poses the following question:

Which of the following statements best describes a key characteristic of physical commodities that investors must consider when making investment decisions?