Hi, my name is Bernard Otabil, and I led the launch of the first ever agricultural commodity index in Ghana. It’s known as the Esoko Ghana Commodity Index (EGCI), and it’s a market price index composed of data on physical commodities. The index tracks prices at two levels: the Esoko Ghana Commodity Index-Retail (EGCI-R) and the Esoko Ghana Commodity Index-Wholesale (EGCI-W). I wanted to share a bit about how to create a commodity index that informs the general public, as well as policy makers, about market trends in your country.
1) First, determine which markets and commodities should be used in the construction of the index. Consider the geographic importance of the markets, the size and the commodities traded in them. Also consider the importance of the commodities to be used, bearing in mind that staple foods or commodities that form a large component of the country’s consumer price index are the most interesting.
2) So now, you need market prices–how are you going to gather prices from these markets? Setup an enumeration process and procedures that ensure price collection on a regular basis, and on time. At Esoko we have trained enumerators who cover 34 markets in the country, collecting prices regularly and feeding them on to our platform using their mobile phones. You may setup a private system like ours, or you may leverage other networks that already collect data. Just make sure it is good, and consistent.