6.2 Market monitoring
Market monitoring should be part of the MEAL framework when the project includes repeated payments. In the case of a one off payment, the market is assessed at preparedness/design stage to make a decision on CBI appropriateness and the impact on the market will be assessed as part of the final evaluation, but there will be no market monitoring per se. The following aspects are included in market monitoring:
- Ensure that the grant amount is still adequate to cover the identified needs or the MEB;
- Ensure the quality and availability of goods is at least as good as at the beginning of the project;
- Assess the continued appropriateness of the chosen delivery modality;
- Ensure the project is doing no harm to the market and creating inflation.
In addition to these considerations, continued price monitoring exercises should be included in the general market monitoring framework. Below are some guiding principles for market monitoring:
- Ensure consistency in price collection;
- Check for irregularities that appear in the collected price data;
- Plot average prices for key commodities;
- Be aware of seasonality in prices;
- Be aware of the difference between the indicated price and the true price (this is especially the case on cultures that rely on bargaining);
- Combine price monitoring with volume (in trends) monitoring as it is difficult to analyse market prices trends without volume trends.
