Food Commodity Trade

The level of price volatility should theoretically be confined to export parity price levels at the lower end and import parity price levels at the upper end of the price band, reflecting supply and demand conditions during surplus and deficit marketing seasons respectively. A greater gap between these export and import parity prices will reflect high marketing costs, often representing high transport costs to and from distant export and import locations. Regional infrastructure investment programs would have great potential to significantly reduce the cost of transport. For producers this would result in increased profitability and competitiveness due to lower input and marketing costs, while consumers would benefit from lower prices due to reduced import costs of food.