Following categories of price instabilities are to be understood in order to have a comprehensive picture of the prices.

 

i) Short term instability or seasonal price variation

ii) Intra-year instability or seasonal price variation

iii) Inter-year instability or trend price variation

iv) Long term instability or cyclical price variation

 

Short term instability refers to the fluctuation in prices which last for comparatively short period of time. Prices may change from week to week, from day to day and within a day.

 

Intra-year instability is due to the behavior of prices seasonally in a year.

 

Prices of farm products never remain the same from one year to another. Inter-year instability means the price movements from year to year.

 

Long term instability is related to price behavior over a period of time. Long term instability is related to the long-term trend in prices.