Why products are flactuating

Michael J Ssali

What you need to know:

  • If the problem is widespread and several farmers get affected the prices of agricultural commodities may go up since demand for them will exceed supply.

The farmer has to be conscious of such issues as fluctuations in the prices of his products. There are risks linked to agricultural investments and over which the farmer has no control. They include bad weather and pests which can destroy crops or starve livestock. Apart from destroying crops, long droughts kill pasture and nutritive fodder grass may be attacked by pests which may result in reduced production of milk and meat.

If the problem is widespread and several farmers get affected the prices of agricultural commodities may go up since demand for them will exceed supply.

Sometimes the farmers are forced to sell their products at higher prices due to the high cost of the inputs used.

These days there is a big hike in the prices of pesticides, herbicides, and fertilisers. Due to the general rise in the prices of essential commodities nowadays labourers are agitating for higher wages.

When the farmer harvests his crops he has to factor in all the overhead expenses before determining the price of his farm’s product in order to make profit. Sometimes farmers fail to recover the money they invest in their activities.

The farmer also often worries about the abundance of his farm’s products on the market.

If for example he produces a big number of eggs and all the other farmers in the neighbourhood produce an equal number or even more there is bound to be a reduction in the selling price of eggs because of the likely stiff competition for buyers.

Eggs are among agricultural commodities that the farmers cannot keep for a long time and often they are forced to sell the products without making the desired profits.

Prices for internationally traded agricultural commodities such as coffee also fluctuate mainly due to the same reasons.

If bad weather or pests hit some coffee producing countries there is scarcity for the crop and so the price for the crop tends to rise.

One way to attract buyers even in circumstances of commodity abundance on the market is to strictly observe cleanliness and hygiene.

Customers always go for good quality products. It is also wise for the farmer to diversify production and invest in more than just one crop. 

Mr Michael Ssali is a veteran journalist,

Welcome!

You're all set to enjoy unlimited Prime content.