Figure 5.4.  Example of the examination price relationships across commodities in the
same market
Time Series Analysis Grouped by Commodities
for MAIZE DRY 90 KG
40,000.00
35,000.00
30,000.00
25,000.00
ZA|CHIPATA|AMIC
20,000.00
ZA|LUSAKA URBAN|AMIC
ZA|MONGU|AMIC
15,000.00
10,000.00
5,000.00
0.00
Month
The price behavior in these markets illustrates some interesting points.  First, Chipata market
is in a surplus producing area and Mongu market is in a deficit producing area.  The relative
maize prices for these two markets show this relationship.  In the 1993/94 agricultural
season, there was a normal harvest in most of the country.  The difference in price patterns
following the harvest (May 1994 to April 1995) shows the difference in these patterns  for
surplus and deficit producing areas and an urban market (Lusaka).  In the 1994/95
production season there was a drought in most of the country that is reflected in the
exaggerated price pattern following that harvest.
5.2.2.4 Step 4: Understanding relative prices
Prices are meaningful only when compared to other prices.  Relative prices highlight the
relative value between two commodities, and by extension the relative purchasing power
between  socio economic groups whose well being depends on buying and/or selling a
particular product.  The selection of which products for this analysis should include the most
important product for each of two different vulnerable  socio economic groups to compare
the change in relative purchasing power due to changes in prices.  Price combinations that
are most commonly used in this  analysis include the comparison between an agricultural
product and 1) another agricultural product (to see the relative value of commodities), 2)
livestock (to examine the terms of trade between farmers and pastoralists), and 3) wages (to
look at the relative welfare between rural and urban populations).  It is also important to
check if there are any combinations of commodities for which the terms of trade is not
stable.  This will help identify compliments, substitutes, and avoid over generalizing.  The
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