Excessive Price Volatility Indicator
This Excessive Price Volatility indicator was developed by the International Food Policy Research Institute (IFPRI) and the data collated on this website is available via http://www.foodsecurityportal.org/.
The indicator provides information on price fluctuations at international exchange markets, which is important as evidence suggests that price increases and volatility transmits to local markets. The FAO recognizes that high food price volatility has a negative impact on food security. This volatility affects particularly the most vulnerable groups (smallholder/family agriculture and low income urban and rural populations). The impacts of price fluctuations at the international exchange market transmitting to domestic markets was exemplified during the 2007/08 food price crisis that affected several countries.
The indicator provides a daily volatility status as well as a visual representation of historical periods of excessive global price volatility from 2000-present. A more detailed description of how this indicator is calculated and assessed can be found under methods.
Excessive Price Volatility
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How to interpret this indicator?
- Visualizes the changes in price development on a selection of staple commodities.
- The indicator will issue a warning (the red shaded areas in the graph above) in the event of strong changes in price development.
- During these shaded periods, the specific commodity experiences excessive price variability (it is a volatile or price development is changing quickly).
Advantages of this indicator?
Timely, accurate and transparent market information is important for addressing food price volatility and achieving the ultimate goal of food security (especially among the poor in developing countries).
It will help reduce inconsistent information on price variability on the global level by providing timely and transparent market information.
Better and more precise information will enable policies to be devised that can mitigate the impacts of volatility on both producers and consumers (especially among the poor in developing countries).
Further advantages can be considered by reading IFPRI’s full press statement here.
What does this indicator capture?
Price abnormalities for key commodities in the global agricultural markets.
Identify timespans of increased price variability on international markets.
Daily updates that forewarns policy-makers and humanitarian agencies about periods of time when excessive food price variability is happening.