IFPRI develops new tool to reduce gaps in information on global commodity prices

BY EDMUND SMITH-ASANTE

The International Food Policy Research Institute (IFPRI), has developed a new tool in collaboration with Sophic Systems Alliance Inc.  (Sophic Intelligence), to analyse daily media coverage to examine the extent to which current expectations regarding food prices, agricultural markets, and food stocks may also impact food prices and increase price volatility.

Known as the Food Security Media Analysis System, the tool scans international media outlets to identify the factors and events that the media consider to have an impact on food prices.

These results can then be compared to other variables, such as global agricultural production and food stocks, to determine if media coverage is consistent with these other variables or if it is in fact contributing to an information gap.

The tool also utilises Sophic Intelligence to generate daily Wiki reports and heatmaps that track terms and phrases found in global food- and commodity-related news articles that may influence global commodity price volatility and food security, while the heatmaps show the relationships between events that affect food and commodity prices in countries around the world.

Announcing the tool recently, IFPRI said it is based on the premise that a major factor contributing to food-price spikes may be a global lack of information or a prevalence of misinformation regarding global agricultural markets and food stocks. 

“The lack of factual information regarding global production and stocks can lead governments across the globe to engage in panic buying that serves to further drive up prices,” the research institute said in a statement on the new tool. 

According to IFPRI, this phenomenon occurred during the Russian wildfires of 2010, when the country banned the export of wheat to prevent a domestic shortage, saying despite the fact that global stocks at that time could support reduced exports from Russia, futures returns for wheat showed several days of price volatility. 

“It seems clear that the information provided by the media, and thus the expectations set regarding current food-security scenarios, can play a role in rising food prices and price volatility,” the institute believes. 

Stating the importance of the new tool to global food security, Maximo Torero, IFPRI’s Markets, Trade, and Institutions Division Director said: “The Food Security Media Analysis System provides valuable daily intelligence that will allow us to more accurately measure market expectations as well as the influence of press articles on current commodity price fluctuations.” 

“It can assist with analysing the cause and effect of commodity-related articles in the global press,” he added.