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.
It is almost universally accepted that food prices in developing countries have become more volatile in recent years (Gerard et al. 2011; G20 2011). It is widely presumed that this pattern applies to Africa, as indicated by stakeholder consultations (OECD 2011). However, few if any empirical studies have examined recent trends and patterns in food price volatility in the region.
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.