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Nov 26 2012 |
| Seasonal Price Index: An Effective Tool for Analysis - Part I |
Seasonal Price Index (SPI):
Agricultural Production is highly affected by seasonal parameters and the demand cycles, influenced by the weather conditions and the biological processes. These demand and supply simulations lead to seasonal price patterns. These patterns replicate themselves due to the biological methods integrated in the agro-commodity production. Awareness regarding such patterns will undoubtedly improve the trading decisions made by traders.
SPIs reflect regular price patterns that resulted by the demand and supply factors. Some of the factors include weather conditions, type of agro-commodity, and consumer demand. SPIs show more reliability when more historical price data is available.
Calculation of SPI - the Average Percentage Method:
First of all, an annual average of specific products for each year or season is calculated. Then, each data item is expressed as a percentage of the corresponding annual average. Finally, the percentage values for each year are averaged; the resultant numbers are the Seasonal Index.
Procedure
1. Calculation of Average Monthly Prices
|
|
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
Avg. |
|
2000 |
12.8 |
11.4 |
9.9 |
8.8 |
9.3 |
8.4 |
7.5 |
7.1 |
7.8 |
7.2 |
6.7 |
6.7 |
8.63 |
|
2001 |
8.5 |
9.3 |
11.5 |
12.5 |
12.1 |
12.5 |
11.2 |
10.8 |
9.6 |
8.7 |
7.7 |
6.9 |
10.11 |
|
2002 |
9.1 |
8.6 |
7.5 |
7.2 |
6.0 |
5.4 |
5.5 |
5.9 |
5.6 |
4.6 |
4.4 |
4.0 |
6.15 |
|
2003 |
5.5 |
5.0 |
4.2 |
3.8 |
4.0 |
5.0 |
5.8 |
5.6 |
6.1 |
6.1 |
5.6 |
5.8 |
5.21 |
|
2004 |
8.3 |
9.0 |
8.6 |
7.5 |
6.8 |
6.9 |
6.1 |
6.1 |
6.8 |
6.5 |
7.0 |
7.6 |
7.27 |
|
2005 |
8.3 |
7.6 |
7.7 |
7.4 |
7.0 |
6.7 |
6.9 |
6.8 |
6.6 |
8.6 |
9.8 |
8.5 |
7.66 |
|
2006 |
8.6 |
8.7 |
9.1 |
10.3 |
12.4 |
10.4 |
9.8 |
7.7 |
7.4 |
11.3 |
10.0 |
10.7 |
9.70 |
|
2007 |
11.3 |
11.7 |
11.6 |
12.0 |
13.0 |
12.9 |
13.5 |
10.4 |
9.8 |
13.5 |
14.5 |
14.7 |
12.41 |
|
2008 |
14.0 |
14.4 |
14.1 |
12.3 |
11.4 |
10.7 |
10.7 |
14.8 |
14.0 |
9.7 |
9.0 |
8.9 |
12.00 |
|
2009 |
8.5 |
8.3 |
7.8 |
8.3 |
8.7 |
8.4 |
8.8 |
9.9 |
9.7 |
8.9 |
8.4 |
8.7 |
8.70 |
|
2010 |
8.6 |
8.8 |
9.0 |
9.5 |
9.4 |
9.1 |
8.9 |
8.6 |
8.8 |
8.3 |
8.9 |
8.1 |
8.83 |
|
2011 |
9.2 |
8.5 |
10.2 |
9.7 |
9.7 |
9.3 |
9.5 |
8.7 |
8.8 |
8.6 |
8.5 |
8.8 |
9.13 |
Note: The figures above are random and do not depict a particular commodity.
contd. |
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| Posted by at 1:32:08 PM |
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