It is not necessary for the demand and the supply chain or the production house to be in the same place. It is the traders who distribute the product from the place of production to various locations as per the demand. In fact, an apt example would be the oil, which is predominantly made in the Middle East but is highly of demand in the Asian countries.
There are various factors affecting the demand supply equation of commodities and energy products. The demand is often driven by a country’s economy, the advancement in technology and even due to the changing policies of the ruling government over a longer period.
Of course, adverse climatic conditions or unfavorable political situations can cause this equation of demand vs supply to fluctuate instantly.
The firms that trade in physical commodity do not just work on the long term arrangement for a steady supply but they also work to mitigate any risk due to the short term imbalances in the market.