1.1 Purpose of the manual
The purpose of this manual is to provide guidance to early warning professionals on
appropriate and sustainable methods for monitoring price data. This manual will assist the
analyst to understand: 1) what influences price behavior, 2) how prices behave, 3) which
markets and commodities to monitor, 4) suggested procedures, and 5) what to report about
price and market developments in early warning publications.
The focus of this manual is primarily on using graphical analysis and visual interpretation.
The reason for this approach is that it is simple. By plotting the data on a graph one can
easily see price trends, identify if there is missing data or data outliers, and identify odd
price behavior. There are a few instances where techniques for quantitative analysis or data
transformations are presented. In these cases the justification for this analysis is provided, as
well as the techniques.
This manual is not intended to provide guidance on how to create a market information
system (MIS). A MIS collects, manages, and disseminates market information. Its primary
role is to increase market transparency by making market information available to all market
participants. It also serves as a source of market information. As such, it is the primary
source of price data for early warning. This manual assumes that a MIS or other sources of
price data are readily available. These alternative sources of price data are also discussed in
This manual is intended to complement and reinforce concepts presented in other available
documents. For example, SADC Regional Early Warning System has developed a series of
Technical Handbooks, including Market Information for Early Warning (written by Jan
Helder and Jan Joost Nijhoff) and Food Security Bulletins Vol 1: Analytical Content of
Monthly Bulletins (written by Yeb Hiemstra). Within the FEWS Project two documents
are worth noting. First, the initial exploration of using price data in early warning was
presented in Price data in a famine early warning (written by Chuck May). Second,
FEWS/Somalia (written by Philip Steffen and Sidow Addou) developed a set of training
materials on markets and marketing systems.
1.2 Challenges of price analysis
The main challenge to early warning professionals is to develop a system to monitor
prices that are consistent with both available resources (human and financial) and
decision maker needs. Early warning professionals tend to be over extended in the
demands for their time and usually have limited resources. This manual provides
practical suggestions that recognize these constraints.