Global Commodities

Global Commodity Chain

To understand how a global commodity chain works on a continental level, let's dive back to 13th-century Europe and examine wool.

Trade agreements such as these occurred, where access was possible until the Age of Discovery brought about a host of new possibilities in terms of global commodities.

During this period, a more recognizable modern chain of commodities emerged. The dynamic of power between the colonizer and the colonized meant that commodity chains favored the wealthy, European aggressor who could direct the distribution of their product, as Beckert et al. assert:

These chains also provided the blueprint for modern capitalism. Now we will look at some of the major commodities that emerged in the global chain of demand.

Global Commodities: List

Of course, it is impossible to consider the chain of every global commodity during this period. However, to give you an idea of the global nature of the trade networks, we can include a map alongside this list of where some important commodities originated.

• Chocolate (Mexico)
• Coffee (Yemen)
• Cotton (Bahamas)
• Gold (Ghana)
• Porcelain (China)
• Silver (Peru)
• Spices (India)
• Sugar (Haiti, Dominican Republic)
• Tea (China)
• Tobacco (the Americas)

Although not an exhaustive list that considers every commodity, this should give you an idea of the worldwide nature of trade in these resources.

Global Commodities: Examples

Now let's move on to the role of specific commodities in commodity chains to understand these new trade relationships that the Age of Discovery ushered in.

Sugar

One of the commodities that had the most profound effect on the commodity chain was sugar. Originally grown on islands in the Atlantic Ocean including the Canary Islands and Madeira, sugar was not for the common European man in medieval times, though royalty purchased it through Venice merchants. However, the Portuguese began to prioritize sugar once they colonized Brazil in 1500.

Despite their ambition and naval prowess, Portugal was a relatively small nation, with a population of only one million. They could not hope to have the workforce to maximize the possibilities that the Brazilian land and climate presented to cultivate sugar. So they turned to Africa, where they had already established trading posts. Between 1525 and 1866 almost 13 million Africans became slaves in the New World!

Sugar Commodity Chain

Sugar was and remains a truly global commodity.

Here is the commodity chain the plantations in Brazil helped to create and the Portuguese were able to manipulate.²

America (Colony) — Europe

• Tools and equipment for farming.
• Food, textiles, and weapons (to barter in exchange for slaves in Africa)
• Product (raw, then refined)

America (Colony) — Africa

• Workforce (African slaves)
• Equipment (ships, living facilities, and other commodities from the colony to exchange with African elites)

America (Colony) — Africa — Asia

Tobacco — Slaves — Woven fabrics

This diagram demonstrates that even during the absence of sugar in the final two chains, its demand led to the sourcing and bartering of other valuable commodities.

Silver

Silver was another commodity found in the New World after the conquests of colonial powers. The Spanish colonizers stumbled across the precious commodity, commonly found in Mexico and Peru. Between 1500 and 1800, these two regions produced 85% of the world's silver. However, 40% of this ended up in China.

The Europeans sold silver to China and enjoyed the spoils of Chinese silk, porcelain, and then tea in return. Brading and Cross note that:

This time, instead of using African slaves, the Spanish used the forced labor of local indigenous populations. The workforce required also gave rise to local merchants who gained wealth within internal trade throughout the Spanish Americas. These enterprises were responsible for installing a capitalist mentality in these regions.

Spices

Spices were readily available without the necessity of extraction. The Silk Road enabled spices to travel across Asia and East Africa from the Indian Ocean. Portuguese voyager, Vasco da Gama pioneered European access to exotic spices such as cloves, cumin, ginger, nutmeg, and pepper.

Sought after not only for their flavor-enhancing abilities, but also their medical import amid the belief that the body was a delicate system of balances, spices did not require the complex refining process involved in commodities such as sugar and silver.

Fig. 3 - Artist's depiction of Portuguese Goa in the 16th century

Global Commodities Today

Over the centuries, the landscape of global commodities has changed. Improvements in working conditions and the abolishment of slavery have allowed developing countries a greater chance to forge their wealth. Nevertheless, the European Union suggests that we have reached:

A troubling example of this is the reverberations of Russia's 2022 invasion of Ukraine, driven by Vladimir Putin. The resulting sanctioning of gas and other commodities has caused huge price hikes for the European Union. This shows what can happen if an important cog in the commodity chain goes its own way.