Food prices and climate change in Sudan: A stochastic approach

The paper is aimed at simulating the change in prices of rain fed agricultural commodities of sorghum and millet in Sudan according to different rainfall scenarios. The analysis is of particular importance due to the country’s vulnerability to climate change. According to the official sources, about 97% of the Sudanese agriculture is under rain fed and the two commodities analyzed are the staple food for the population: a change in rain affects not only productivity but also food security in terms of food accessibility and availability. The variables adopted are the monthly prices of sorghum and millet and the monthly mm. of rain falls from 2002 to 2010 in the two most important production markets of Gedaref and Obeid. The methodology adopted makes reference to the risk analysis and consists of estimating the elasticity of price to rainfall, establishing a stochastic model, taking scenarios and simulating results. The scenarios selected allow to compare a basic situation with a dry and a wet scenario. Results achieved permit to compare for each market and commodity the likely price change according to the different rainfall scenarios and the related probability in a cumulative density function. In general terms, for both sorghum and millet, Gedaref shows the highest vulnerability to rainfall changes while Obeid, in the dry scenario, is characterized by the highest probability of a price change greater than the upper bound. These results are of specific importance for policies aimed at designing stabilization interventions in the two volatile markets of sorghum and millet and for farmers as key market signal for planning production.