Analysis and determinants of retail and wholesale staple food price volatility in developing countries

Developing countries in Africa, Asia and Latin America were deeply affected by the food and economic crisis. Indeed, many countries are still suffering from high food price volatility. This paper goes beneath the global scale analyses to find out what happened to domestic agricultural market volatility in developing countries for three staple foods commodities: rice, wheat and maize. We measured the volatility using simple methodologies at retail and wholesale level for 36 developing countries using FAO database. Secondly we attempted to explain the cross-country variation in price volatility through the use of several explanatory variables related to macroeconomics and trade conditions. Given that most of the poor are net food consumers, such large price volatility has severe impacts on the effective purchasing power of the poor, which in turn likely affected the number of meals eaten as well as the nutritional quality of the food consumed.

Guillaume Pierre, Cristian Morales-Opazo, Mulat Demeke Food and Agricultural Organization of the United Nations, Rome, Italy - ULYSSES project, EU 7th Framework Programme