Archive:Food price statistics

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Food products purchased by consumers generally reach the consumers after a process that involves the agricultural, food industry, transport and distribution sectors. The process of production and trade from the agricultural commodities to the consumer products is referred as the supply chain. The Food Prices Monitoring Tool (FPMT) provides information on price developments for food products through the stages of the supply chain. It also provides some data on price levels for certain food products.

Comparing the developments of prices in various stages of the supply chain provide a better picture of the potential malfunctions of the food supply chains and better insight on price transmission mechanisms. This comparison gives indications on how actors react on changes in their inputs prices. In order to allow that comparison of prices, the available data on price developments through the supply chain is brought together. The indices included in the Food Prices Monitoring Tool are those of agricultural commodities prices, producer prices, import prices and consumer prices.

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Source: Eurostat (educ_ilang)

Introduction

Food Supply Chain

There are many actors in the chain: farmers, traders, food industry enterprises, retailers, etc. Each player combines a number of inputs and processes them. The resulting outputs are sold afterwards to other actors in the chain. In each step of the supply chain the products may change. The prices paid for the outputs in each step reflect the values of the inputs, the payment for labour and other production factors, and the profit margins.

The supply chain may be relatively simple for some food products and more complex for others. It may also differ across countries. The same consumer product in a country can be produced through alternative production processes. Prices of each input in the supply chain may change over time. These changed prices for inputs may be passed through to the next player in the chain and change the prices of intermediate products or they may affect the profit margin of the players involved. Changes in the production process may influence production costs, prices and/or profit margins.

Development of the Food Prices Monitoring Tool

The first prototype of the European Food Prices Monitoring Tool was developed in 2009 in line with the communication "A better functioning food supply chain in Europe". Previously, the European Parliament called for an increased transparency of EU agro-food prices and margins (is it talking about the EP resolution on fair revenues for farmers?) and the Commission had suggested how to improve the food supply chain in the Communication "Food Prices in Europe”.

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In order to better simulate the food supply chain, Eurostat defined, together with experts in the Commission, a number of supply chains to be monitored. The tool gives information on price developments for different parts of the supply chain. For each supply chain and per country several series are presented:

• The Harmonized Index of Consumer Prices (HICP) for the product group in the selected chain according to COICOP (Classification of Individual Consumption by Purpose).
• The Import Prices (IP) for a maximum of two CPA (Statistical Classification of Products by Activity) classes related to the selected chain (complete...)
• The Producer Price Index (PPI) for a maximum of two NACE (Statistical Classification of Economic Activities in the European Community) classes related to the selected chain.
• The Agricultural Commodity Prices index (ACP) for a maximum of two commodities related to the selected chain.

Initially, a first set of 17 supply chains was selected for the prototype of the Food Prices Monitoring Tool and HICP, PPI and ACP series. In that prototype, three levels of detail were distinguished:

• The aggregate level of the total food consumption by consumers, the COICOP group 01.1.
• The level of eight 4-digit COICOP classes 01.1.1 to 01.1.8.
• Eight more detailed subclasses below COICOP 4-digit levels.

Afterwards the Food Prices Monitoring tool was extended including import prices, since for many products international trade play an important role. The set of 17 supply chains currently surveyed is detailed in Table 1.

Starting 2015 the FPMT will be based on the COICOP-5 digits classification. It implies that HICP indices will be slightly updated to comply with the new classification. 18 additional supply chains are to be included. The set of 18 additional supply chains is detailed in Table 2.

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