Excessive Food Price Variability Early Warning System
Who we are
The Food Security Portal is a continuation of the European Commission-funded project “World food crisis: Support for food security monitoring and analysis for appropriate policy responses.” The portal was initiated in 2010 in response to lessons that emerged from the 2007-2008 world food crisis, including the need to address the causes and mitigate the effects of high and increasingly volatile food prices. Since then, the FSP has continued to provide information and tools related to food price volatility. In addition, it has expanded its suite of tools that support policy makers’ ability to respond to the risks presented by food crises and to increase resilience to these risks, particularly among poor and rural populations.
The Excessive Food Price Variability Early Warning System is a tool of the Food Security Portal that identifies periods of excessive price variability (i.e. price variability that exceeds a pre-established threshold), and it is updated on a daily basis to identify days that are within periods of high, moderate, and low price variability.
The tool is based on a statistical model that formally models the behavior (fluctuations) of commodity price returns (i.e. day-to-day percentage changes of commodity prices) using futures market prices closest to maturity. The instrument can serve as an early warning system for unusual periods of excessive price variability that could help for timely responses.
Background of the tool
Excessive food price volatility (variability) affects farmers, traders, processors and consumers – and it threatens food security. In the aftermath of the 2007-2008 food price crisis and post-crisis commodity price volatility, the Food Security Portal developed the tool presented here.
The Excessive Food Price Volatility tool provides you with a visual representation of historical periods of excessive global price volatility from 2000-present, as well as a daily volatility status. It serves as an early warning system for timely responses. Alerts produced by this tool can be used to determine appropriate and timely country-level food security responses.