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

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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

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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 Limited-competitive procurement:

Competitive and noncompetitive procurement, vouchers and cash:

National or central markets in source country Up to 5 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 counterfactuals8

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 non-competitively procured commodities

• The following slides list number of markets by pilot type– The next section discusses how to select markets within

each category

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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

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

Regional ProcurementCompetitive, noncompetitive

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Local ProcurementCompetitive, 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 ProcurementLimited 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 ProcurementCompetitive, Vouchers and Cash, Limited Competitive with in-depth evaluation

Counterfactual source markets (up to 5 mkts):

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

Counterfactual Markets (up to 10 mkts / communities)

Counterfactual recipient communities (up to 5 communities):

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

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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

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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

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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 recipient-country 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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Commodity name(s)

Secondary wholesale price data available?

Secondary retail price data available?

Remote Less Remote

OR, likelihood of sourcing

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 markets by probability of procurement

(Check one)

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Selecting source communities for limited competitive

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

• 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

Secondary wholesale price data available?

Secondary retail price data available?

Remote

Less Remote

Recipient community 1Recipient community 2Recipient community 3…

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(Check one)

•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 recipient (destination) communities

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

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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

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Selecting Markets to Monitor

Exercise:

1.Draw a map of your country2. 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