_ESTIMATING FOOD PRICE INFLATION_ _19_ events have been more significant than others. For example, in Afghanistan, the average ratio between price increase and price uncertainty in local currency as measured over all time steps equals 0 _._ 66. At this value, inflation is positive but price uncertainty outweighs price increase and so there is no strong incentive to hold on to food to hedge against currency depreciation risks. This is opposed to Sudan, South Sudan and the Syrian Arab Republic, where the increase in food prices has not only been extremely high, but has also outweighed food price uncertainty by roughly a factor 2. Alternatively, food prices in Afghanistan rose by 14.09% annualized in 2020, which seems low when compared to some other high inflation events, but highly significant when compared to the relatively low price volatility over that same time period (inflation was 2.67 times volatility).

Inflation-targeting countries also aim for prices to be stable on low time frames. Tables A6 and A7 condense the high frequency results by presenting annualized figures. An FCS-wide average is included at the bottom. In total, price estimates for 1223 markets and 43 foods underly these figures. For all _year × countries_ combinations for which estimates are produced (361), only 48 annualized inflation rate estimates fall within the 0-2% targeting range, while 51 estimates cross a critical inflation threshold of 50%. The FCS-wide results highlight the elevated inflation levels during the period associated with the World Food Price Crisis of 2007-08 and the aftermath of the pandemic. The annualized monthly price change in 2008 peaks at geometric average of 19 _._ 52% across the full set of countries, while remaining mostly within a modest several percentage point range over the 2009 to 2018 period. The estimated average inflation rate then spikes again at 27 _._ 46% in the year of the pandemic, while the preliminary 2021 inflation estimate of 22 _._ 65% remains well above levels of the World Food Price Crisis of 2007-08. The results in table A7 highlight that price uncertainty has remained more constant. A striking result is that average price uncertainty was higher during the World Food Price Crisis of 2007-08, peaking at an annualized rate of 13 _._ 92%, while hitting 10 _._ 52% during the pandemic shock and even dropping to 8 _._ 1% in the preliminary 2021 estimate. This means that the recent high inflation event was not only stronger in terms of price increase, but also more significant when compared to natural price volatilities in the two periods. It is from this perspective again interesting to transform the estimates to Sharpe ratios. Both the World Food Price Crisis of 2007-08 and the post-pandemic inflation surge was associated with prices increasing relative to price uncertainty, and this price development is more pronounced in the post-pandemic inflation event. For example, from 2009 to 2018 the FCS-wide average annual Sharpe ratio for food prices was 0 _._ 55, but during 2007-08 it averaged 1 _._ 30. During 2020, this ratio hits 2 _._ 70, while the preliminary annualized 2021 estimate sits at 2 _._ 80, meaning that returns in food prices outweigh price volatility risks of holding food as an asset by nearly a factor 3. This means the ratio of inflation to price uncertainty is almost double that of the World Food Price Crisis of 2007-08.

The monthly price estimates indicate that prices can rise and fall dramatically