Encouraging foreign exchange
A cross-border initiative to share market information in West Africa
Dr Mira Slavova
The International Trade Centre works with local partners and market data services to gather and share price information and promote cross-border trade throughout West Africa.
Recent fluctuations in oil prices have had a considerable effect on food prices and food security in many ACP nations. How much the price of oil has impacted the costs of agricultural goods, in particular, is proportionate to the distance these products have to travel to reach customers. This price instability has created significant tensions in several West African countries, for example, which increasingly depend on fossil fuel for their food supply. The ripples caused by the recent oil price shocks demonstrated the relative advantages of regional and sub-regional trade in agricultural produce compared to inter-continental, international trade.
The International Trade Centre (ITC) introduced the Trade at Hand initiative in 2006, in which mobile phones are used to enhance export opportunities and encourage cross-border trade among developing countries. The project consists of three parts, Market Prices and Market Alerts, both of which provide market information, and mCollect, a market information collection system which, while still operating as a pilot project, makes the gathering and distributing of market information much easier and helps to promote agricultural trade throughout West Africa.
Market Prices
The Market Prices component aims to help small and medium-sized export enterprises in developing countries become more competitive. The system delivers daily information to businesses via mobile phones detailing international market prices, and gives entrepreneurs the chance to respond quickly to changing prices. ITC first introduced the service to exporters of fruits and vegetables in Burkina Faso and Mali. Currently, the system delivers daily text messages (SMSs) with the prices of primary export products at the Rungis International Market in France. Later in 2009, ITC will provide weekly price quotes of products from markets in Germany, Spain, Italy, UK and Belgium.
Rungis International Market, in particular, is well-placed to give Trade at Hand detailed information on international market prices. More than 20,000 regular buyers visit the market every day to buy and supply food to 18 million people throughout Europe. And, as a member of the French Federation of Markets of National Interest and the World Union of Wholesale Markets, it also has the task of promoting the international exchange of information regarding price fluctuations at wholesale and retail markets.
Market Alerts
Market Alerts sends market information via SMS directly from a regularly updated website. The service mainly provides the data to trade support institutions (TSIs), which are organisations that promote trade through networking services, market information services, legal advice and partners of government support programmes. The alert system enables TSIs to deliver up-to-date news from domestic markets, announce commercial opportunities and publicize relevant news from abroad to exporters. The SMSs are sent automatically from the website, which means the TSIs can communicate rapidly with their partners and reach large groups of individual participants in the agricultural market directly and efficiently. Currently, 14 TSIs in Mali, Burkina Faso and Senegal use Market Alerts to strengthen their domestic trade networks. Similar organizations in Benin and Ghana have also expressed interest in using both Market Prices and Market Alerts.
mCollect
The third component is mCollect, which is a price collection system that was developed to complement the Market Prices service. ITC developed the service after several national price collection institutions expressed interest in a system to record, collate and share market information using mobile phones. mCollect makes it easier for the information collectors to gather domestic prices straight from the local agricultural markets.
Once the prices are collected, the mCollect system distributes the information via SMS to interested businesses in the region. The system can also be used together with other market information initiatives such as TradeNet/Esoko and Resimao, which make market data available on the web and via mobile phones. By distributing local market prices to potential buyers throughout the region, services like mCollect can help to strengthen domestic and cross-border trade between neighbouring countries.
The introduction of mCollect has helped improve existing methods of price collection. Current methods usually involve a team of people having to visit many, often more than 150, domestic marketplaces to write down all the prices on paper. The information is then distributed by telephone, fax, by post and, in some cases, by transcribing SMS messages. This process can be cumbersome and slow, and difficult to maintain when there are several price changes in a short period of time.
Field representatives of national TSIs use mCollect to gather observations from local markets and to code those observations using an agreed coding scheme. They then distribute the information to a central depository using text messages. This method has considerable advantages as it saves a lot of time for the local price collectors and means that the market information is immediately available. Therefore, mCollect not only improves the domestic price capture mechanisms but it also to increases the level of price coordination and trade among countries in West Africa. ITC is currently introducing mCollect to TSIs in three countries in West Africa.
A network of price collectors in Burkina Faso, Mali and Senegal visit urban and rural markets throughout their respective countries to gather prices for products such as millet, white sorghum, red sorghum, white corn and yellow corn. They type the relevant codes for each product and price into their mobile phones and send the information via text messages. The field workers also evaluate the availability of each product, noting whether it is scarce, abundant, average, or indeterminate.
Local organizations, including Société Nationale de Gestion du Stock de Sécurité Alimentaire in Burkina Faso, the Malian Chamber of Commerce and Industry and the Senegalese Export Promotion Agency, then provide domestic and foreign price information to wholesale businesses, traders and farmers. So far, ITC has only worked with the Trade at Hand project in West Africa but they are currently developing plans to extend the service further to East Africa.
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Dr Mira Slavova is an e-business consultant with the International Trade Centre.
International Trade Centre (ITC)
Since 1964 the ITC has helped businesses in developing countries by providing trade development solutions to the private sector, policymakers and other trade support institutions (TSIs). ITC focuses on the collection, management and exchange of trade information and intelligence with regards to the availability and prices of agricultural produce of grains, fruit and vegetables in particular. However, due to the large number of Least Developed Countries in the region, sub-Saharan Africa, and especially West Africa, present some unique challengers and are therefore a focus for the efforts of ITC.
Illustration
Captions for illustration
- Collectors in all participating countries send coded price information via SMS from the local markets to a national number.
- The information is decoded at a central depository.
- Information from all participating organizations is collated and published on a central website.
- Price collection organizations receive and validate the information concerning their country.
- Price collection organizations distribute the price information relevant to their country and local business interests.