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xxx terms

Arbitrage

Taking advantage of a price differential. The two most common types of arbitrage related to food security are spatial arbitrage (where commodities are moved from areas or markets with lower prices to areas or markets with higher prices and the difference exceeds the transfer costs) and temporal arbitrage (where commodities are obtained, stored and sold at a point in the future when prices are expected to be higher and the difference exceeds the costs associated with the temporal transfer.

Assembly Market

A market where smaller quantities of a commodity are accumulated or aggregated usually from different farmers and small scale traders. Assembly markets facilitate marketing and the movement of commodities as well as reduce the costs of marketing. They can also enable sellers of smaller surpluses from more remote locations to reach distant buyers.

Barriers to Entry

The degree with which firms can influence market prices so that they earn profits which are large but at the same time restrict the potential entry of rival firms into the industry. The major categories of barriers to entry are absolute cost advantage and economies of scale.

Border Point

The exact place (often, but not always, a market location), within the Reporting Country where the trade flow is observed.

Budget Share

The portion (percentage) of the household budget spent on a given good (maize), service or grouped goods and services (food). This is essentially the same thing as expenditure shares.

Capital Constraints

The difficulty to obtain capital to start a business.

Capital Cost

Cost of purchasing or renting capital goods.

Collective Action

The process of farmers jointly acting as a group in production, processing or marketing activities.

Collusion

1. When rival companies and traders cooperate, overtly or covertly, for their mutual benefit.

2. The act in which traders jointly determine the prices at which they buy agricultural products from farmers.

Commission

A percentage of money that a trader or agent charges for conducting a transaction on behalf of a seller or buyer.

Commodity

Something tangible, that has value and can be exchanged. Commodities include food and cash crops, livestock, non‐food consumer items and even labor.

Commodity Availability

Monitors the availability of a product in a particular market to identify abundance, stability, or scarcity

Commodity Balance

The balance of staple foods.

Commodity Flow

The movement of commodities through space, generally from surplus to deficit areas.

Competition

A market structure in which there are many sellers of a product.

Complementary Good

Also, Complement

A commodity which is consumed in combination with another commodity. When demand for one commodity rises, demand for the other will rise as well.

Conduct

Also, Market Conduct

The patterns of behavior that traders follow and strategies that they employ in adjusting to the markets in which they sell or buy.

Conglomerate Conduct

The act of businesses merging together and doing businesses that may or may not be related.

Consumer Basket

A typical household’s market (expenditure) basket of goods, services, fees, etc. It is used for tracking the prices of consumer goods and services and the overall cost of living. The basket may be comprised of the actual quantities of consumption goods or services acquired or used by households in some period. Sometimes, a consumer basket can also be made up from hypothetical quantities created.

Consumer Price Index (CPI)

An index of consumer prices which measures the change in prices associated with a typical market basket of goods and services over time. The CPI expresses current prices in terms of prices during the same period in a previous year (base or reference year), to show inflation or changes in purchasing power.

Consumption Season

Also, Marketing Season

The period of time during which agricultural output is sold, typically extending from one harvest period to the next.

Contract Sale

A transaction that specifies a price of a commodity and the date of delivery at a future period of time.

Core CPI

See Consumer Price Index (CPI)

A price index where certain items are excluded from the CPI basket on the basis that their prices are highly volatile, subject to temporary influences or are affected by government policies. The index is used to calculate “core inflation” and reflects the underlying inflationary pressures in the economy.

Cost Insurance Freight (CIF)

Pricing or valuation of a good, including all of the costs (known as transfer costs) of delivering a good to the point of consumption. It may be contrasted with the FOB (or free on board) where the transfer costs are excluded. Imports are often valued at CIF prices and exports at FOB prices.

Cost of Living Index

An index that measures between two periods the change in the minimum expenditures that would be incurred by a consumer, in order to maintain a given level of standard of living or welfare, assuming that his/her preferences or tastes remain unchanged.

Cross Border Trade

The movement of commodities from one country to a neighboring country, and is usually measured in terms of magnitude (e.g., metric tons) and direction (from country A to country B).

Cross Price Elasticity of Demand

See Elasticity of Demand

The relationship between two commodities which can be substituted for one another (see also to elasticity of demand).

Deficit Areas

Areas that either do not produce or produce an insufficient amount of a given commodity to meet local demand (derived or final demand).

Demand Curve

The relationship between the price of a commodity and the quantity that buyers are willing or able to buy, with all other things being equal. For most commodities, there is an inverse relationship between price and quantity demanded: a rise in price is associated with a decline in quantity demanded.

Derived Demand

Demand for a commodity to be used as an input to another productive activity (e.g., the demand for maize as feed for poultry production).

Destination

The country where goods were ultimately delivered.

Dynamic Analysis of Margins

Analysis of changes in marketing margins over time.