Parity

Also Parity pricing or Price parity

Making prices of a commodity in one location equivalent to the same commodity in another location, usually in a different country. It adjusts for marketing costs involved in transferring and transforming the product between two locations.

Perfect competition

A market situation in which it is assumed that there are many sellers and buyers and the market determines the price of food commodities. Both buyers and sellers become price takers and not price makers.

Performance

The extent to which markets or traders do things that society expects – do they operate efficiently, provide a reliable source of food, supply food at reasonable prices, etc.

Prediction

An act of foretelling based on observation, experience, or scientific reason.

Presence countries

Countries where locally-based analysts work fulltime from a national office.

Price

The cost or value of something expressed in monetary terms.

Price differential

A spatial or temporal difference in prices.

See Spatial arbitrage and Seasonal arbitrage.

Price discrimination

The act of charging consumers different prices for the same product.

Price elasticity

The percentage change in the quantity demanded (supplied) given a percentage change in the price of a commodity.

Price reference period

The period to which prices in other periods are compared. This is used when calculating the CPI.

Price relative

The ratio of the price of an individual product in one period to the price of that same product in the reference period.

Price spread

The difference between two prices.

Price transmission rate

The degree of ease with which price information is relayed and communicated among different markets and market participants over geographic space and time.

Pricing standard operating procedure

Determining price by agreed formula, standard mark‐up or manufacturer recommended store prices.

Probabilistic forecast

Identifying the likelihood of a specific event. Probabilistic forecasts capture the likelihood of rainfall being in a given tercile of the historical distribution. It allows the forecaster to identify shifts in the likelihood of events based on certain conditions.

Problem specification

The translation of a hazard such as drought into economic consequences at household level.

Processing conversion factor (PCF)

The ratio of the quantity of a processed product to the quantity of the unprocessed product.

Product differentiation

The act of slightly changing a product so that you can convince customers that the product is better and charge a higher price. (E.g. one kilogram of maize flour in a nice paper bag compared to one kilogram maize flour scoped from a sisal bag). The maize flour can be the same quality but one is sold for a higher price.

Production efficiency

The process of producing a commodity at the lowest average cost. There is no wasting of scarce resources that are used to produce the good. This would involve farmers adopting methods that maximizing output per unit on inputs used.

Profit margin

The difference between the cost and the selling price of a product or service.

Projected outcome

A quantified estimate of access to food and cash, taking into account the shock and household responses to it, in relation to a survival and livelihoods protection threshold.

Projection

An estimate of future possibilities based on a current trend.

Projection period

Months selected for scenario period (e.g., typically eight months for a FEWS NET Food Security Outlook scenario).

See Most Likely, Most Likely 1, and Most Likely 2.

Public relations

How firms and business organizations treat and interact with their customers.

Purchasing power

The value of money, as measured by the quantity and quality of products and services it can buy. The amount of goods or services that one unit of money can buy.