How Volatile are African Food Prices?
"Instability in the price of staple foods is an important source of risk in developing countries. This is particularly true in Africa south of the Sahara because of the low incomes of many African households. Poor urban households allocate a large share of their income to food, so food price volatility affects their purchasing power. Many poor rural households depend on agriculture for their livelihood, so they too are directly influenced by food price volatility.This brief uses recent data to explore food price volatility over time in international and African markets. It also examines price volatility for different commodities and in different markets within Africa. The findings show that although food price volatility in international markets has increased in the past five years, it is still relatively low.In a group of 11 African countries, food price volatility is high, but it has not increased in recent years. These results challenge the conventional wisdom that food price volatility in Africa has increased in the wake of the global food crisis and suggest that domestic factors may contribute more to African price volatility than do international price fluctuations."