Why Commodities Fluctuate | Monitor


The farmer should be aware of issues such as fluctuations in the prices of his produce. There are risks associated with agricultural investments over which the farmer has no control. They understand bad weather and pests that can destroy crops or starve livestock. Besides destroying crops, long droughts kill pastures and nutritious forage grass can be attacked by pests, which can lead to reduced milk and meat production.

If the problem is widespread and several farmers are affected, the prices of agricultural products may increase because the demand for them will exceed the supply.

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

These days, there is a sharp rise in the prices of pesticides, herbicides and fertilizers. Due to the general rise in commodity prices these days, workers are campaigning for higher wages.

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

The farmer is also often worried about the abundance of his farm produce on the market.

If, for example, he produces a large number of eggs and all the other farmers in the vicinity produce an equal number or even more, there is bound to be a reduction in the sale price of the eggs due to the probably fierce competition for the buyers.

Eggs are among the agricultural commodities that farmers cannot store for long and are often forced to sell the produce without realizing the desired profit.

The prices of internationally traded agricultural products such as coffee also fluctuate mainly for the same reasons.

If bad weather or pests hit some coffee-producing countries, the harvest becomes scarce and the price of the harvest therefore tends to increase.

One way to attract buyers even when there is plenty of produce on the market is to strictly adhere to cleanliness and hygiene.

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

Mr. Michael Ssali is a seasoned journalist,

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