PRICE WATCH October 2019 Prices November 30, 2019

PRICE WATCH October 2019 Prices

November 30, 2019

KEY MESSAGES

? In West Africa, staple food market supplies are increasing at the start of the 2019/20 marketing year with availability from recent harvests as well as substantial regional carry-over stocks. Month-on-month grain prices in the Sahel decreased or were stable, at below-average levels. However, local and imported rice prices remained above-average in most coastal countries. Market functioning and trade activities remain disrupted in the insecure and conflict-stricken Greater Lake Chad basin, Tibesti region, and Liptako-Gourma region. Nigeria's land border closure has had a significant domestic and regional impact, hindering trade especially with neighboring Benin and Niger (Page 3).

? In East Africa, maize and sorghum prices increased seasonally in surplus-producing Uganda and Tanzania. Prices were stable or declined in Kenya, South Sudan, Sudan, and Somalia with increased availability from local production and relatively lower-priced imports from regional markets. Prices remained stable at elevated levels ahead of harvests in Ethiopia while wheat flour prices were stable at elevated levels in Yemen. Livestock prices were stable or increasing due to ample feed and water availability (Page 4).

? In Southern Africa, maize supplies on major markets were at average to below-average levels. Maize grain prices were stable or increasing. Maize prices will likely continue increasing with the progression of the lean season, peaking in January or February. Maize grain was generally able to circulate between surplus and deficit areas, except for Zambia where export restrictions remained in place. Informal maize grain exports into Tanzania were sustained as traders continue to pre-position stocks for re-export to Kenya (Page 5).

? In Central America, markets were well supplied in October with availability from the recent Primera harvest, carryover stocks from the Postrera harvest, and international imports. Prices followed seasonal trends, decreasing for maize and increasing or remaining stable for beans. Regionally, maize prices remained above average while bean prices remained below average. In Haiti, ongoing civil unrest continued to disrupt market activities. Both local and imported staple foods prices increased significantly in October. The Haitian gourde was largely stable against the U.S. dollar but maintains a 30 percent year-on-year depreciation (Page 6).

? Central Asia sustained adequate supplies and Figure 1. FEWS NET Country Coverage intraregional trade is expected to fill local wheat deficits within the region. Local wheat availability in Afghanistan, Kazakhstan, and Pakistan is expected to remain at average levels. Wheat prices have been increasing and are slightly above average in Kazakhstan, Pakistan, and Afghanistan (Page 7).

? International staple food markets remained well supplied. Rice prices were stable or decreased, maize and wheat prices increased, while soybean prices were stable in October (Figure 2). Global crude oil prices decreased as markets traded in a relatively narrow range after heightened price volatility in September. Global fertilizer prices were stable or decreased in October (Page 2).

Source: FEWS NET.

FEWS NET monitors trends in staple food prices in countries at risk of food insecurity. The Price Watch provides an update on market and price trends in selected reference markets. Specific trends for key reference markets and commodities are available in the Price Watch Annexes 1 and 2. FEWS NET gratefully acknowledges partner organizations, ministries of agriculture, national market information systems, the Regional Agricultural Intelligence Network, the Food and Agriculture Organization of the United Nations (FAO), the World Food Programme (WFP), and others for their assistance in providing price data.

FEWS NET fewsnetinfo@

FEWS NET is a USAID-funded activity. The content of this report does not necessarily reflect the view of the United States Agency for International Development or the United States Government.

PRICE WATCH

November 2019

INTERNATIONAL MARKETS

Current situation

? International rice prices were either stable or decreased in October with improved availability as the new Asian crop begins to reach markets and import demand remains relatively weak (InterRice). Rice prices remained close to both 2018 and 5-year average levels (Figure 2).

Figure 2. Food commodity prices in selected international markets, January 2013 ? October 2019

? Global maize prices increased due to continued supply uncertainty from U.S. harvest and a significant year-onyear reduction in U.S. ending stocks (Figure 3). Maize prices are above 2018 and 5-year average levels except for Argentina where prices are close to average (FAO and USDA).

? International wheat prices were stable or increased in

October after falling for three consecutive months, due to partly to harvest concerns in Argentina,

Source: Food and Agriculture Organization of the United Nations (FAO), World Bank.

Australia and North America (AMIS and FAO). Wheat price trends were below October 2018 levels and varied relative to 5-year average levels.

Figure 3. Global Market Indicators, 2019/20 compared to 20142018 average (% variation)

? Global soybean prices were stable in October following positive developments in U.S. - China trade talks. Soybean prices were close to 2018 levels and below 5year average levels (AMIS and IGC).

? International crude oil prices decreased in October as markets traded in a relatively narrow range after heightened price volatility in September following an attack on Saudi crude oil processing facilities (U.S. Energy Information Administration). Global fertilizer prices were stable or decreased in October from higher supply and lower demand. Fertilizer prices were below 2018 and 5-year average levels (AMIS and WB).

Source: FEWS NET calculations based on USDA data.

Outlook

? Global rice production will likely fall marginally due to expectations for a smaller crop in some major Asian producing countries but will likely continue to outpace consumption levels (InterRice and AMIS).

? Global maize production is expected to fall below previous year levels, while trade will be below 2018/19 record levels due to reduced U.S. export availabilities and weaker demand (IGC and USDA).

? Global wheat production is expected to recover in 2019/20 from last year's reduced levels. Trade is expected to rebound year-on-year due to increased demand from Asia and Africa, while prices will increase moderately (USDA and AMIS).

? Global soybean production for 2019/20 is projected to fall to a 4-year low on lower production in U.S., India, Russia, and Canada. Chinese demand to be weak as the industry adjusts to the spread of African Swine Flu (USDA and AMIS).

? International crude oil production in non-OPEC countries will likely offset lower OPEC production targets (U.S. Energy Information Administration). Global fertilizer supply will likely be adequate due to sustained capacity expansions (AMIS).

Staple food price trends across the countries monitored by FEWS NET will vary considerably in the coming months in response to local and regional market conditions; international market trends will play a more limited role in most countries (Figure 2). Fuel price trends in FEWS NET countries will depend on both international market conditions, the evolution of local exchange rates in relation to the U.S. Dollar, and the design and implementation of local fuel import and price policies.

Famine Early Warning Systems Network

2

PRICE WATCH

November 2019

WEST AFRICA

Current situation

? Food availability in West Africa was strengthened in October by ongoing harvests and carry-over stocks. Market supplies remained above average in several countries. However, insecurity continued to limit market functioning and access in the Greater Lake Chad basin, Tibesti region, and the Liptako-Gourma region. Moreover, Nigeria's land border closure limited the volumes of commodities typically traded with Benin and Niger (including rice, fresh produce, and cash crops). Niger, which typically relies on imported coarse grains (maize and sorghum) from Nigeria, reoriented itself toward Benin and Burkina Faso for imports given the disruptions from the Nigeria border closure.

Figure 4. October 2019 sorghum prices in West Africa compared to five-year average (% change)

? Seasonal demand decreases were observed in most markets as households and traders were yet to begin

Source: FEWS NET.

replenishing stocks. Below-average demand and reduced sales were reported in several markets. Nevertheless, urban demand and regular trade flows to consumption zones

Figure 5. October 2019 imported rice prices in West Africa compared to five-year average (% change)

remained dynamic.

? In Nigeria, food supply and household stocks increased. Prices declined compared to the previous month on most markets. However, prices for local and imported rice have increased substantially in recent months as land borders remain closed, thereby limiting rice imports. Relative to last year and the average, most staple prices were lower or stable, yet rice prices remained above average (Figure 4).

? In the Sahel, coarse grain prices were seasonally stable or

decreasing compared to the previous month given the above-stated supply and demand factors and continuing

Source: FEWS NET.

subsidized sales. Prices remained mostly below both last

year and average levels (Figure 5). In coastal (mostly non-XOF) countries, above-average prices persisted for both local

and imported rice due to the depreciation of the local currency and inflation, especially in Liberia and Sierra Leone.

? Livestock markets remained dynamic as pastoralists returned from transhumance and sell livestock to meet their cash needs. Eastward flows were reduced by insecurity and border closures. Pastoralists were instead opting for less usual westward and southward routes. Monthly prices trends varied across the region, increasing in some markets due to good animal weights and decreasing in others due to high supply as traders turn to secure markets and move from conflict areas. Stable livestock prices were stable compared to average.

Outlook

? In the Sahel, market supplies will continue to increase seasonally, and demand will continue to decrease. Typical seasonal price decreases are expected throughout the harvest and post-harvest periods (February/March), and prices will be similar or below average in most areas. Market functioning will remain below normal in insecure and conflict-stricken zones, though security measures or negotiations could mitigate setbacks. Nevertheless, a prolonged closure of Nigerian land borders into 2020 will continue to affect imported staples.

? In Nigeria, stocks will continue to increase, significantly reducing market reliance for households. Seasonal price decreases will continue through to December/January. Prices will likely remain below average, except for local and imported rice which will remain affected by the border closure. In the northeast, despite some positive impacts on the general food availability and access situation from the ongoing harvests, market activities and trade routes will remain restricted due to persistent insurgent attacks as well as military operations.

Famine Early Warning Systems Network

3

PRICE WATCH

November 2019

EAST AFRICA

Current situation

? Market and price trends varied across East Africa in October Figure 6. Average January to October price and exchange (Figure 6 and Figure 7). Markets and price dynamics remain rate trends in Sudan (Al Qadarif), 2014-2019

heavily affected by conflict and severe macroeconomic

conditions in Yemen, South Sudan, and Sudan. Staple food

prices continued to increase across many areas of surplus-

producing Uganda and Tanzania due to seasonal drivers and

high domestic and regional demand. Livestock price trends

varied based on local rangeland and conditions and export

demand. High inflation sustained elevated prices in Yemen,

Ethiopia, South Sudan, and Sudan.

? At the beginning of the 2019/20 maize marketing year,

Tanzania had an estimated tradeable stock of 500,000 MT.

Tanzania is expected to remain the main supplier of maize

exports to the East Africa region in the short term (FEWS NET 2019). Maize prices in Tanzania have followed an increasing

Source: FAMIS/MoA, Sudan.

trend in recent months but were stable in October. Maize prices in Uganda, another important surplus-producing country, have trended upwards in recent months but remain

Figure 7. October 2019 maize prices in East Africa compared to the previous year (% change)

below average while bean prices have declined at above-

average levels.

? In Yemen, the parallel market value of the Rial (YER)

continued to depreciate due to limited availability of foreign

exchange reserves. Conflict and severe macro-economic

instability continued to disrupt markets and sustain

significantly high prices. In South Sudan, prices declined

during the post-harvest period, but remained at very high

levels. Conflict incidences have declined, thereby permitting

the recovery market, and livelihood activities and improving

humanitarian access. Although oil production and exports

have also resumed, revenues have not reached the levels

required to reestablish adequate foreign exchange reserves

to bolster the South Sudanese Pound (SSP).

? Maize prices were stable or declined seasonally across most

markets in Kenya with availability from local harvests and regional imports. Prices across most of Ethiopia remained stable at high levels in October before the start of the November-to-January harvest. However, maize, sorghum, and teff prices were higher than last year and recent five-

Source: FEWS NET estimates based on Food and Agriculture Market Information System (FAMIS), FSNAU, Uganda Bureau of Statistics and Farmgain, Tanzania Ministry of Industry, Trade and Marketing (MITM), Ethiopia Grain Trade Enterprise (EGTE), National Drought Management

Authority (NDMA).

year average levels because of recent below average and delayed harvests, persistent high inflation, and the depreciation

of the local currency. Community unrest in the areas bordering central Somalia led to restricted imports in affected areas.

Millet and sorghum prices remained seasonally stable or started declining following local harvests in Sudan. However,

the seasonal decline was not as pronounced as usual due to high local production and transportation costs and other

direct and indirect effects of the severe macroeconomic situation. As the exchange rate has depreciated, price levels and

variability has increased (Figure 6). After increasing atypically earlier in the year, maize and sorghum prices declined in

Somalia as rainfall conditions improved.

Outlook

? Tight maize market supplies are expected to maintain elevated maize prices through the end of 2019. Prices of most staple commodities in the region are nevertheless expected to decline between October and December as harvests set in and reduced rural household demand. Current macroeconomic and conflict conditions are expected to maintain generally elevated prices and market performance trends in Yemen, Sudan, and South Sudan.

Famine Early Warning Systems Network

4

PRICE WATCH

November 2019

SOUTHERN AFRICA

Current situation

? In Southern Africa, maize supplies on major markets were at average to below average levels. Intra-regional trade remained strong as South Africa continued exporting to the grain deficit countries of Botswana, Eswatini, Lesotho, Namibia, Mozambique, and Zimbabwe. In Madagascar, local and imported rice supplies were at average levels.

Figure 8. White maize grain prices in selected markets (USD/kg)

? Maize grain prices were stable or increasing at major regional markets (Figure 8). In South Africa, white maize prices were stable on the SAFEX market while yellow maize prices increased marginally. Maize grain prices remain significantly above their respective October 2018 and 5-year average levels (Figure 9). Price trends were mixed for common substitutes, including rice and cassava.

? In South Africa, maize supplies declined on the SAFEX

market. Maize supplies will cover domestic consumption needs and exports to regional maize deficit countries. Export parity prices were increasing for both white and yellow maize and were above international reference prices. In Zambia, maize supplies were declining at key reference

Source: FEWS NET estimates based on data from SADC and government ministries.

Figure 9. October 2019 maize grain prices compared to the previous year (% change)

markets, and prices were either stable or increasing by up to

50 percent. Formal maize exports have been negligible

following the government's April 2019 decision to

reinstitute export restrictions. Informal maize grain exports

have continued, mainly to Tanzania, DRC, and Malawi, but

were down 19 percent from their September 2019 levels.

Tanzania received the bulk of these informal exports as

traders pre-positioned stocks for re-export to Kenya.

? In Zimbabwe, maize grain and maize meal prices increased

rapidly doubling on some reference markets. Reduced 2019

harvests and a deteriorating macroeconomic environment

remain the key drivers. The Zimbabwean dollar (ZWL) was

stable against the U.S. dollar for the first time since its

introduction in February 2019. Tanzania's maize supplies

were at average to above-average levels, while maize grain

prices were stable across key reference markets. In Malawi,

Source: Ministry of Agriculture, Irrigation, and Water Development of

maize grain prices were stable or increasing by up to 21 percent. Informal maize grain imports, mainly from Mozambique, were below 2018 levels while informal

Malawi, Ministry of Agriculture of Mozambique, Central Statistics Office of Zambia, SAFEX, WFP, OdR (Madagascar for yellow maize) and FEWS

NET.

exports to Tanzania were significantly above 2018 levels as traders leverage Tanzania's higher purchase price. In

Mozambique, maize grain prices exhibited mixed trends but remained significantly above average. In Madagascar, local

and imported rice were stable while yellow maize and cassava prices were stable or decreasing. In DRC, maize meal and

cassava flour prices were stable or increasing by up to 37 and 82 percent respectively.

Outlook

? Maize supplies at major regional markets are likely to be near or below-average levels. South Africa will most likely export above average volumes to maize deficit countries of Botswana, Eswatini, Lesotho, Namibia, Mozambique, and Zimbabwe. South Africa's international maize imports are likely to remain strong in order to offset yellow maize deficits. Zambia's maize grain exports to the region will remain restrained due to below average 2019 harvests. Tanzania's exportable maize surplus will most likely be destined for Kenya. Maize prices will continue increasing across key reference markets in the region and will likely peak in January or February. Maize prices are expected to be sustained at well above their respective 2018 and 5-year average levels for the remainder of the 2019/20 marketing year.

Famine Early Warning Systems Network

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download