2.c.1: Indicator of food price anomalies

Definition
The indicator of food price anomalies (IFPA) identifies markets prices that are abnormally high. The IFPA relies on a weighted compound growth rate that accounts for both within year and across year price growth. The indicator directly evaluates growth in prices over a particular month over many years, taking into account seasonality in agricultural markets and inflation, allowing to answer the question of whether or not a change in price is abnormal for any particular period.

The thresholds for the IFPA are expressed as the normalized difference of the compound growth rate of prices from their historical mean for the predefined period of time. And three ranges are established:


 * a less than half a standard deviation difference from the mean is considered normal;
 * a difference that is half but less than one standard deviation is considered moderately high;
 * a difference from the historical mean that is at least one standard deviation greater than the mean is considered abnormally high.

Rice Impacts
As one of the most important staple crops in the world, price shocks can adversely affect the ability to purchase rice within the general population, as well as affect the ability to export at a competitive price. The Philippines, Thailand, and Bangladesh were hit hard by the 2008 global rice price crisis due to lack of proper control over quantities, speculation, and increasing demand. Since then, price and volume controls have been put in place to make sure prices will not see the same shock; Indonesia imposed rice price ceilings to protect consumers and control inflationary pressure

Overlaps with the SRP Instruments
SRP members, IRRI, FAO all monitor global rice prices, both domestic and for exports. Price information is generally available publicly, and are obtained from ground surveys.