Appendix I

Key price and market analysis terminology

Administered pricing

:  Prices set by government.  Examples are pan territorial and pan 

seasonal pricing.

Barriers to entry

  Factors that prevent or place new entrants to trade at a cost

disadvantage relative to established firms within an industry.

Barter

  A method of exchanging goods and services directly for other goods and

services without using a separate unit of account or medium of exchanges. A successful

barter transaction requires a double coincidence of wants.

Buffer stocks

  Stocks of a commodity held in an attempt to even out price fluctuations

in primary commodities. The operators use the stock to mitigate fluctuations in prices by

selling from the stock when prices are high (as a result of shortage in the market) and by

buying the commodity when prices are low (as a result of surplus in the market).

Buyers' market

  A market characterized by excess supply in which sellers consequently

experience difficulty in selling all their output at anticipated prices to the advantage of

buyers.

CIF

  Cost, Insurance, Freight. A term which describes pricing or valuation of a good to

include 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.

CPI (consumer price index)   

The cost of a given basket of goods used by classes of

consumers, with different commodities given different weights.

Cash crops

  Crops grown by peasant farmers mostly for sale in the market as opposed to

crops directly consumed for subsistence purposes. Some food crops can become cash

crops when a surplus is produced (e.g., maize in southern Africa).

Competitive markets

  A market in which a very large number of buyers and sellers

trade independently, and no one trader can control significant quantities to be able to

substantially influence prices.

Consumer

  Any economic agent involved in the consuming of final goods and services.

Households, not individuals, make many consumption decisions. This is important since

households may take decisions based on some compromise of individual wants within the

household.

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