Copy the page URI to the clipboard
Staritz, Cornelia; Newman, Susan; Tröster, Bernhard and Plank, Leonhard
(2018).
DOI: https://doi.org/10.1111/dech.12401
Abstract
Restructuring of global and local markets has led to an increased influence of commodity derivatives markets on commodity price setting. This has critical implications for price risks experienced by actors along commodity chains. Commodity derivatives markets have undergone significant changes that have been referred to as the ‘financialization of commodities’, which we define as an increase in trading activity by financial investors and the reorientation of business strategies by commodity trading houses towards risk management and financial activities. This article assesses how these global financialization processes affect commodity producers in low-income countries via the operational dynamics of global commodity chains and national market structures. It investigates how prices are set and transmitted and how risks are distributed and managed in the cotton sectors in Burkina Faso, Mozambique and Tanzania. It concludes that uneven exposure to price instability and access to price risk management have important distributional implications. Whilst international traders have the capacity to deal with price risks through hedging, in addition to expanding their profit possibilities through financial activities on derivatives markets, local actors in producing countries face the challenge of increased short-termism — albeit to different extents depending on national market structures — with limited access to risk management.
Viewing alternatives
Metrics
Public Attention
Altmetrics from AltmetricNumber of Citations
Citations from DimensionsItem Actions
Export
About
- Item ORO ID
- 69901
- Item Type
- Journal Item
- ISSN
- 0012-155X
- Project Funding Details
-
Funded Project Name Project ID Funding Body Not Set 14686 Jubiläumsfonds of the Oesterreichische Nationalbank NCCR‐Trade Regulation Project Not Set Swiss National Foundation Central Research Fund Not Set University of London - Keywords
- commodity markets; financialization; global commodity chains; commodity prices; price risks; price risk management; cotton sector; Africa
- Academic Unit or School
-
Faculty of Arts and Social Sciences (FASS) > Social Sciences and Global Studies > Economics
Faculty of Arts and Social Sciences (FASS) > Social Sciences and Global Studies
Faculty of Arts and Social Sciences (FASS) - Research Group
- Innovation, Knowledge & Development research centre (IKD)
- Copyright Holders
- © 2018 International Institute of Social Studies
- Depositing User
- Susan Newman