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High price volatility in selected markets

06/11/2017

Price volatility measures the rate at which prices rise or fall over a specific period of time. High price volatility makes it difficult for farmers to take production decisions because of uncertainty about future prices. It also affects food security of vulnerable populations whose access to food is reduced by high prices and who cannot afford to buy in bulk when prices are low. The measure of price volatility used in the graphs below is the standard deviation of the log monthly price changes for the preceding 12 months. Alongside this, the average of the log monthly price changes for the preceding 12 months is also plotted, helping to determine the general trend in prices over the period, which is independent of the volatility. All calculations are based on prices in real terms.