Food prices are affected not only by climate change and commodity futures, but also by the media coverage. However, more often than not, it is difficult to assess how or to what extent the media coverage of a particular commodity is influencing its price movement.
A new media-tracking tool, developed by the Washington-headquartered International Food Policy Research Institute (IFPRI), tries to answer just that.
Termed as the ‘Food Security Media Analysis System’ (FOMA), the tool tracks as many as 31 news feeds related to global food prices and related issues and compares them with other variables, such as global agricultural production and food stocks, to determine if media coverage is consistent with the other variables or it is contributing to an information gap.
Maximo Torero, director of IFPRI’s markets, trade and institutions division and the main man behind the tool, said the tool could assist in analysing the cause and effect of commodity-related articles on the global press. He told Business Standard the system would track stories on six major parameters.
The stories to be tracked would be on global food security or food prices, those related to the ongoing national, regional, or global food crises, stories on prices (international, regional, and national) or crop conditions of major agricultural commodities, articles and news of oil prices and finally articles related to agriculture trade and agriculture and food policy research.
Once the news items are identified, these are then uploaded on the FOMA, which will then analyse the text and look at phrases in the articles that influence commodity price volatility and food security.
Any user then can look at different combinations of words related to food prices within the system and immediately get a heat map, indicating the number of articles in the media mentioning those specific topics.
The basic purpose of developing the tool, as Torero argued, is not to keep a tab on such coverage or provide any value judgments, but to inform policy makers and the general public about the the media consensus on a developing scenario related to food prices.
“We have identified that media coverage of commodity prices could have an important impact on prices and therefore, it’s important to reduce the gap of information and better inform policy makers and stakeholders so that price expectations are more informed,” Torero said.
The tool is also important because it has been seen that direction of correlation between media coverage of food price and related issues is positive in times of price increase, but is negative at times of price decline.
“The lack of factual information regarding global production and stocks can lead governments across the globe engage in panic buying that serves to further drive up price,” IFPRI said.
This is an important message at a time when a number of countries, including India, is facing deficient rains.
All media, which are available on the web in English language including Indian press and their coverage of commodity and food prices can now be tracked, Torero said.