“Global food prices remain high and volatile even though the average global Food Price Index did not change between July and September. Domestic food prices also remained volatile in the same period. But domestic price volatility does not follow a clear pattern, making it difficult to predict the direction of future domestic prices. Among the 20 countries that experienced the largest increases in food prices in the most recent global spike between June 2010 and February 2011, some saw further increases (as much as 86%), while others experienced stable or decreasing prices (as much as 25%) thereafter. There are multiple reasons that make both global and domestic prices volatile and it is unclear which factor or factors dominate. Therefore monitoring of food price volatility must remain vigilant, more so in the context of a persistently troubled global economy. Global price volatility remains slightly higher than domestic food price volatility. Volatility in domestic food prices seems to be driven more by country characteristics and conditions than by shocks to global food prices. Domestic prices are more volatile in low-income and landlocked countries than in middle-income countries and countries with port access.”
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