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Change in Food pricesin the last 10 years(choose one of the food commodities) - Essay Example

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Food exportation has largely helped in minimizing the risk of food insecurity in most parts of the world. Over the years the issue of food prices has however become an important determinant…
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Change in Food pricesin the last 10 years(choose one of the food commodities)
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"Change in Food pricesin the last 10 years(choose one of the food commodities)"

Download file to see previous pages Factors that influence the changes in prices of cereal when compared to overall prices of food are undertaken. There is also a discussion on the relationship between food prices and oil prices.
To better examine and understand how food prices are changing, the FAO uses a metric known as food price index to measure changes in food prices on a monthly basis, an average of which is extended to yearly determination of changes in food prices. Below, data are presented to examine how cereal prices have changed over the last 10 years as compared to overall food prices. The cereals price index and food price index of the FAO are used in these analyses. The food price index is made up of the average of 5 food group price indices which are meat price index, diary price index, cereals price index, vegetable oil price index, and sugar price index (FAO, 2014). Cereals price index is on the other hand comprised of prices of such cereal products as wheat, rice, and maize. Figure 1 below compares food price index as an average of all food prices to cereal prices from 2005 to 2014.
From figure 1 and table 1, it is seen that the prices of cereals as compared to overall food prices have alternated from 2005 to 2014. What this implies is that whenever food prices go up, cereal prices come down. At the same time, when food prices go down, cereal prices begin to rise. This has been the trend without any change. It can also be seen that from 2005 food and cereal prices both rose sharply till the middle of 2008 when prices began to fall. The fall however lasted for only 12 months till the middle of 2009 and prices started rising again till the last quarter of 2011, since which time there has been a steady decline.
The data above shows two major trends, one of which is the periods within the last 10 years when prices have gone up and when prices have come down. This section tries to compare the trend of changes ...Download file to see next pagesRead More
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