Local Staple Food Price Indices and Integration with Biophysical variables

1. Molly E Brown NASA Goddard Space Flight Center Local Staple Food Price Indices and Integration with Biophysical variables

2. Collaborators • Tim Essam and K. Leonard, UMD • F. Tondel, B. Stabler, Chemonics FEWS NET • G. Eilerts, USAID • Jennifer Thorne and Bristol Mann, students • VarunKshirsagar, World Bank

3. Causes of Vulnerability • Where and when international commodity prices (food, fuel) are important to local food access • International prices are affected by the use of commodities for biofuels • Global agricultural weather and its connection to food prices • Question of where does weather-related production variability matter? • 85% of all food never crosses an international border • How much of local food prices are driven by global commodity price fluctuations?

4. Global Indices of Food and Fuel Food prices are as high as 2008 for many commodities.

5. Price indices for five regions • Food insecure regions: • West Africa • East Africa • Southern Africa • Central Asia • Central America

6. Commodity Baskets –important for relevance to diets of the poor • FAO cereals index • Wheat, Rice, Corn at international ports • Measured at capital city markets only • Regional Indices • Cereals only (wheat, rice, corn) • Non-cereals (beans, potatoes, teff, sorghum, millet, cowpea, cassava, yams) • Both capitals and non-capitals

8. How do global commodity prices impact local food prices? How do different regions behave? • FAO Index should be useful in forecasting dynamics of local prices in East Africa, Central America and Central Asia • There appears to be no relationship between FAO Cereals Index and prices in West Africa and Southern Africa (excluding South Africa) Brown et al 2012 Global Environmental Change

9. East Africa as a region is integrated into the international commodity market. Non-cereals (Green lines) are higher than cereals, and are less integrated into international markets Non-capitals (light lines) are higher than capital prices

10. Granger causality results show that West Africa is NOT integrated into the international market Non-cereals (Green lines) are higher than cereals (blue) Non-capitals (light lines) are lower than capital prices

11. Country Level Results InteGrated Not Integrated Benin, Burkina Faso, Chad, Cote d’Ivoire, Gambia, Ghana, Mali, Niger, Senegal Burundi, Kenya, Rwanda , North Sudan, South Sudan Tanzania, Uganda Guatemala Malawi, Mozambique, Zambia • Cape Verde, Guinea, Nigeria • Ethiopia • Afghanistan, Tajikistan • Djibouti, Mauritania, Togo?, Yemen • El Salvador, Honduras, Haiti Brown et al 2012 Global Environmental Change

12. Country Level Results Results from regression derived from 2003-8, applied to 2009-11 data Wide diversity of importance of global commodity prices on local prices Value of satellite data varies cross countries. Brown et al 2012 Global Environmental Change

13. Characterizing local markets and their relationships with biophysical environment and international prices Volatility: measured as the standard deviation of the monthly returns (i.e. percentage changes) of local prices from 2006-2010

15. Conclusions • East Africa, Central America and Central Asia are more integrated into the global economy • Consequences are exposure to variable global commodity prices (2008, 2011) • ‘Double Exposure’ when local production fails during times of high global prices • West Africa and Southern Africa (excl. SA) are less integrated • Local environmental performance is central to food security outcomes • Regions produce most of the food they consume, but when production fails access to imported food is restricted • Monitoring agricultural production remains important in both integrated and non-integrated regions for understanding vulnerability to climate