Analysis of long-term prices of micronutrient-dense and starchy staple foods in developing countries

Abstract

The continued price increase in food commodities has long been a concern to academia and policymakers because of its substantial impact on poor consumers. Existing literature has concentrated on the cost of micronutrient-dense and starchy staple foods and the price rise in different commodities. Yet, the long-term price growth of micronutrient-dense and starchy staple foods and the price growth gap between micronutrient-dense foods and starchy staple foods have not been given much attention. The paper aimed to estimate the long-term trends in prices and volatility of micronutrient-dense and starchy staples and identify factors that have sustained the growth in prices of food commodities in developing countries. We have used the autoregressive and panel autoregressive distributed lag models to analyse the trends in relative prices and the effects of income growth. The results showed that micronutrient-dense food prices in real terms grew on average by 0.03% per month more than starchy staple food prices, with the expectation of a 12% growth gap in the next 30 years. The volatility of micronutrient-dense food items exceeds starchy staple foods in most domestic markets. Also, the prices of micronutrient-dense foods were more volatile in international markets than in most developing countries. Income growth in developing countries was one of the factors that contributed to the declining relative price of micronutrient-dense food commodities. Other factors, such as the high production of staple foods and their price stabilization policies, may have caused price trends to persist. Policies that enhance price stabilization for micronutrient-dense foods, supplementation, fortification, dietary diversity, and nutrition-sensitive interventions such as biofortification may be adopted in developing countries.