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Abstract
What is a global price? Studying the making of prices in spot, options and futures markets, the article ethnographically addresses this question by using world cotton trade as its empirical context. It argues that global market prices are not set by the mere coming together of demand and supply, but are produced as mercantile tools. These tools or prosthetic prices are realized by a multiplicity of actors. The article shows that instead of focusing narrowly on price setting, policy makers and researchers should attend to the conditions of price realization. In world and regional markets, prices are realized in multiple forms. Drawing on contemporary economic anthropology and sociology, the article maps the rich world of prices in their multiple manifestations and processes of realization. Price realization in the world cotton market is performed and maintained by constant interventions in the making of the markets and their prices through different forms of perceptions, scientific assumptions, standardizations of the object of exchange, various calculative tools, rumours and indexes. In conclusion, the article hints at the political implications and social scientific consequences of seeing the world price as a mercantile prosthesis.
ACKNOWLEDGEMENTS
I would like to thank Michel Callon, Timothy Mitchell, Julia Elyachar, Vincent Lepinay and Bruno Latour for their contributions to the paper. Also thanks to the two anonymous reviewers who provided me wonderful critique and suggestions.
Notes
1. See, for instance (Varian Citation2002).
2. The cotton market is predominantly a man's world. Women are usually excluded from cotton markets, whether in villages in Egypt and Turkey, or the Cotton Futures and Options Market in New York City.
3. This observation can be extended to all physical commodities traded in world markets.
4. 1 metric ton equals 1,000 kilograms, or 2,205 pounds.
5. These standards are usually contested and challenged in almost all rounds of exchange. Buyers and sellers usually hire other agents called controllers to navigate this inherently slippery ground.
6. 2,205 (1 metric ton equals 2,205 lbs.) X 1,000 (he wants to buy 1,000 MT) X 65.15 cents.
7. ‘Research in the wild’ is a term Michel Callon uses to refer to the way non-scientists produce knowledge (Callon & Rabeharisoa Citation2003).
8. Indexicality is a concept Maurer borrows from linguistic anthropology (Maurer Citation2002). Indexicality refers to nature of the representational world with reference to which actual things in the world are made visible.
9. Reinhart Co. Market Report, No. 43/39, 26.09.2003.
10. The Commodity Futures Trading Commission is an independent agency created by the US Congress in 1974. It is the regulator of commodity futures and option markets in the United States.
11. The price includes daily reports, CIF Quotes, and weekly reports. It was £3,659.76 or 5,193.89 Euro on October 7, 2003.
12. Cotlook recently introduced a new selection of quotations for Far Eastern Asia delivery, but they do not inform the making of the A Index, discussed in the remaining part of the article.
13. Price depression is the most frequent goal of the merchants, for they sell more cotton when cotton prices decline. This is because mills tend to use more cotton and less polyester, a side-product of petroleum, when cotton prices are relatively cheaper than oil prices. Moreover, merchants need to use less capital when prices decrease. This is also why, whether in the US or Egypt, they have a class interest to depress prices to an optimal level, so that farmers can continue to produce.
14. SEAM is a website that brings together those who want to trade cotton in an internet-based cash market.
15. African Franc Zone countries include Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger, Cameroon, Senegal, Chad, Togo, Congo, Gabon, Guinea-Bissau, Equatorial Guinea, and the Republic of Central Africa; however, only quotes from the first nine countries are included in the A index.
16. Premiums and discounts are applied for different cotton qualities.
17. Strict Low Middling (SLM) 1 1/16 inch, leaf grade 4, micronaire 3.5–3.6 and 4.3–4.9, strength 24–25 gram per Tex.
18. See, for instance, Cotton Outlook, June 7, 2002, p. 20.
19. depicts only a portion of the December 2003 options prices. The original list is many times longer. Because it presents all prices for each of the ten cotton futures contract months between May of 2003 and March of 2005, it is not useful to reproduce it here in full length.
20. See the note at the end of .
21. I would like to thank an anonymous reviewer for helping me fine tune the summary of assumptions.
22. He is referring to the 300-point or 3-c/lb increase of the cotton futures price.