Local and Regional Procurement Learning Alliance
7. Market Data
MARKET SELECTION
Are (some of) the secondary data
suitable?
• Objective: Identify markets from which to collect
primary data
– Approach: Compare what secondary data are available with
what is needed
• Prepare a list of all distribution communities, all
source communities, and major markets
– Some communities have more than one market
– In these cases, monitor the main retail market
• Within each market category, determine whether any
candidate markets overlap with secondary data
2
Are the data similar (enough) to what the
country office needs?
• Key requirements for matching secondary data to
agency’s data needs:
1st: Check commodity characteristics are the same (or similar)
2nd: Confirm secondary prices are clearly identifiable as retail or
wholesale and that you understand what definitions the
agency is using
3rd: Understand what sales units or volumes are collected for
different trader types (e.g., $/kg; $/bucket; $/sack)
4th: Try to make sure timing of price collection is the same
Are the data similar (enough) to what the
country office needs cont.?
• Commodities with characteristics that do not
precisely match your delivered product’s
characteristics can perhaps be used as proxy data
–
Compare
•
•
•
•
–
Color and size
Processing / condition
Produced within source country
Quality (focus on observable quality differences, i.e., do prices
vary by quality?)
Minor variations in quality, processing, color or size are fine
• Note and report the differences between the delivered
commodity and the commodity with secondary data
Are (some of) the secondary data
suitable? cont.
• Common errors associated with combining secondary
and primary data are:
– Comparing retail and wholesale series
– Comparing raw commodities and processed products
– Failing to convert prices to common currency and
common unit of account
– Using different frequency data or not matching up
periods correctly
– Failing to clarify whether prices are day-specific
observations or period averages or whether prices
are trader-specific or trader averages within a market 5
Part 1: Determine how many markets
to monitor
6
Within each market category: take a sentinel site
approach
• Rarely feasible to monitor all markets
• Sentinel sites are composed of a core set of markets,
regularly monitored
– Markets are selected by country offices, based first on overlap
with secondary data and then selected by community type
(remote or less remote)
– Selected sentinel sites should be representative of
communities
– How to select sentinel sites within each market category is
discussed below
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How many markets within each market
category to monitor?
Market Category
Limitedcompetitive
procurement:
National or central markets in source country
Up to 5
Competitive and
noncompetitive
procurement,
vouchers and
cash:
Up to 5
National or central markets in recipient country
Up to 5
Up to 5
Sample of source markets
Up to 5
None
Sample of recipient markets
Up to 5
Up to 5
Counterfactuals for source markets*
Up to 5
None
Counterfactuals for recipient markets*
Up to 5
Up to 5
*Most pilots will not have counterfactuals
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How many markets within each market category
to monitor?
• The number of markets to monitor will vary by pilot
• The number of markets to monitor may vary by commodity
– Some commodities have more secondary data than other
commodities
– Competitively procured commodities will need to be
monitored across fewer markets compared to noncompetitively procured commodities
• The following slides list number of markets by pilot type
– The next section discusses how to select markets within
each category
9
Regional Procurement
Competitive, noncompetitive
Source Country (up to 5 mkts)
Central markets (up to 5):
•Capital city consumer market
•Major import/export market
•Largest market in area(s) where
procurement is most likely to occur
•Urban or regional consumer
markets
Smaller source markets:
•No additional markets required
Recipient Country (up to 10 mkts)
Central markets (up to 5):
•Capital city consumer market
•Major import/export market
•Largest market in each distribution area
•Urban or regional consumer markets
Recipient/destination markets (up to 5):
•Remote: 2 - 3 mkts
•Less remote: 2 – 3 mkts
10
Local Procurement
Competitive, Non-competitive, Vouchers and Cash
Source/Recipient Country (same) (up to 10 mkts)
Central markets (up to 5):
•Capital city
•Largest market(s) in each distribution area
•Largest market(s) in each source area
•Major import / export market
•Consumer market in major urban area
Recipient/destination markets (up to 5):
•Remote: 2 - 3 mkts
•Less remote: 2 – 3 mkts
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Local Procurement
Limited Competitive (e.g., contracting with smallholders)
Source/Recipient Country (same) (up to 15 mkts)
Central markets (up to 5):
•Consumer market in capital city
•Largest market(s) in each distribution area
•Largest market(s) in each source area
•Major import/export market
•Consumer market in major urban area
Source markets (up to 5)
Recipient markets (up to 5):
•Remote markets: 2-3
•Remote markets: 2-3
•Less remote markets: 2-3
•Less remote markets: 2-3
•OR, Ranked by probability of procurement: 5
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Local or Regional Procurement
Competitive, Vouchers and Cash, Limited Competitive with
in-depth evaluation
Counterfactual Markets (up to 10 mkts / communities)
Counterfactual source markets
(up to 5 mkts):
Counterfactual recipient communities
(up to 5 communities):
Markets that share the following
attributes with LRP source markets:
• Similar agro-ecological zones
• Roughly the same population
• Same distance to a paved road or
same level of access to a primary (daily
or weekly) market
Communities that share the following
attributes with LRP recipient communities:
• Similar agro-ecological zones
• Roughly the same population
• Same distance to a paved road or same
level of access to a primary (daily or weekly)
market
• Similar interventions to the matched
recipient communities
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Part 2: Select markets to monitor
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Frequency of data collection
• All data ought to be collected at least monthly
• If secondary data are collected…
– … monthly: collect primary data at least monthly, ideally on the
same day or in the same week
– …weekly or biweekly: try to collect primary data on same days
as reflected in secondary data
– … daily: select certain days of the month (or week) and collect
primary data on those days as well
• If secondary data are not available, collect primary
data at least monthly, preferably weekly or biweekly
15
Selecting central markets for local procurement,
vouchers and cash
• In pilots where source and recipient countries are the
same, several central markets will overlap. Include a
total of five:
–
–
–
–
Consumer market in major capital city
Major import / export market
Largest market(s) in each distribution area
Largest market(s) in each source area
• Note: for competitive tenders, tracking additional,
smaller markets beyond these five is unnecessary
16
Regional Procurement: selecting central markets in the
source country
• List up to five major/central markets in source country,
including:
– Consumer market in capital city
– Major import/export market
– Largest market(s) in area where procurement is most likely to
occur
• Non-competitive tenders: source market
• Competitive tenders: major urban market
– Other central consumer markets in urban or regional centers
17
Regional Procurement: Selecting central markets in the
recipient country
• List up to five major/central markets in recipient
country, including:
–
–
–
–
Central consumer market in capital city
Major import/export market
Largest market(s) in each distribution area
Other central consumer markets in urban or regional centers
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Comparing selected central markets with secondary data
• Compare your list of preferred source- and recipientcountry central markets with the central markets
reflected in your secondary data
– Check whether commodities in secondary data are the
commodities to be distributed
– Check whether the data are retail and/or wholesale prices
• When secondary data are available for markets and
commodities of interest: use these data to conserve
time & resources
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Source market selection for competitive and
noncompetitive procurement and vouchers and cash
• Competitive procurement, noncompetitive
procurement, vouchers and cash: monitor central
markets only
– Traders are likely to operate in major central markets
– Central markets capture competitive prices
– No need to monitor additional (smaller) source markets
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Source market selection for limited competitive
procurement
• Limited competitive procurement:
– For each commodity, monitor the markets from where it is
likely to be sourced
– If different commodities are noncompetitively sourced from
different markets, repeat below process for each commodity
– Use table on following slide to track information for each
commodity
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Selecting source communities for limited competitive
Commodity
name(s)
Secondary
wholesale price
data available?
Secondary
Remote Less
OR,
retail price data
Remote likelihood
available?
of sourcing
(Check one)
Source Market 1
Source Market 2
Source Market 3
…
• 1st: list all likely source markets in column 1
• 2nd: mark whether secondary retail and wholesale price data exist
for each market
• 3rd: assess each market’s remoteness:
- Use access to paved roads or a daily market as the indicator
- Remoteness is a proxy for spatial integration of remote communities
with distant markets
- Remoteness is a relative and context-specific concept
- Greater remoteness often means higher risk of price variability
• OR 3rd: when procuring from a subset of pre-identified markets, rank
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markets by probability of procurement
Source market selection for limited competitive
procurement cont.
• Objective: identify five source markets to monitor by
commodity
• First, randomly select from those that have secondary data
– Randomly select up to 2-3 markets from list of remote markets
with secondary data
– Randomly select up to 2-3 markets from list of less-remote
markets with secondary data
• OR, rank by procurement probability, if procuring from a
subset of pre-identified source markets
• Even incomplete secondary data is a starting point
• Next, if more markets are still needed to reach the total,
randomly choose among remaining for primary data
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Selecting recipient (destination) communities
Secondary
wholesale
price data
available?
Secondary
retail price
data
available?
Remote
Less
Remote
(Check one)
Recipient community 1
Recipient community 2
Recipient community 3
…
• Similar approach as selecting source markets for
noncompetitive procurement
– Will not vary by commodity
• Fill in the table above
– List all recipient communities
– Identify communities as remote or less remote
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Selecting recipient (destination) communities
•From the table, randomly select
•2-3 communities with secondary data and are remote
•2-3 communities with secondary data and are less remote
•If there are not enough communities with adequate
secondary data, randomly select recipient communities
for primary data collection, by category of remoteness
•In each community selected, monitor the main retail
market
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Selecting counterfactual source markets
• Only required in noncompetitive tendering processes with
in-depth evaluation component
• Counterfactual source communities should not have other
agency programs or projects in place
• Using secondary data, identify up to 5 markets that share
the following characteristics with LRP source markets:
– Similar agro-ecological zones
– Roughly same population
– Same distance to a paved road or same level of access to a
primary (daily or weekly) market
• Wherever secondary data are missing, identify
communities that have the same characteristics as the
source markets, and collect primary data
26
Selecting counterfactual recipient communities
• Counterfactual recipient communities receive
transoceanic food aid
– Should have similar interventions as the matched community (e.g.,
both distribute in school feeding programs)
• Using secondary data, select up to 5 communities
with roughly same characteristics as pilot
communities
– Similar agro-ecological zones
– Roughly same population
– Same distance to a paved road or same level of access to a
primary (daily or weekly) market
• Follow same process as for counterfactual source
communities to identify secondary data
– Primary data collection may be necessary
27
Selecting Markets to Monitor
Exercise:
1. Draw a map of your country
2. Identify on the map the markets where you
are procuring each commodity; write a list of
these markets
3. Identify on the map where you are distributing
the commodities; write a list of these
communities/markets