Price band

A price band is a policy instrument that serves to insulate domestic producers and processors when the world price for a commodity falls below a calculated reference price (e.g., a price target comparable to a commodity support level). Protection is provided by imposing a variable import levy on the imported commodity that raises the importer’s cost to the reference price. Chile, some Andean Group countries, and some Central American countries use price bands to protect specific commodity and processed food sectors.