FSNAU releases Market Update for December 2012
Issued: January 31, 2013
Inflation: The December Consumer Price Index (CPI) declined slightly in South-Central while remaining relatively stable in most regions of the North. The December 2012 inflation compared to the same month a year ago was low in Somali shilling (SoSh) areas but relatively higher in SlSh regions where it is slightly elevated. In Somali Shilling (SoSh) areas, the minimum cost of living is significantly higher than it was in the base period (March 2007); it is moderately up in SlSh areas.
Exchange rate between SoSh and the US Dollar (USD) remained relatively stable over the month under review while the SlSh currency lost slight ground to the greenback. Over the past year, SlSh has depreciated against the USD, whereas SoSh has gained value. The annual appreciation of the SoSh is attributed to inflow of dollars through humanitarian interventions, Hajj livestock exports and intensified investments in infrastructure rebuilding and reconstruction in Mogadishu; increased port functioning and emerging economic and business opportunities, particularly in the capital. The weakened SlSh is due to increased supply and circulation of new higher denomination currency notes.
Local grain prices were mixed- decreased in Hiraan, Banadir, Central and the key producing regions of Bay and Lower Shabelle but remained stable in all other regions. Various factors, including good Deyr 2012 crop production, cereal trade flows to deficit areas, reduced prices of imported food and humanitarian food supply, have impacted on cereal prices. Compared to a year ago, cereal prices are significantly lower in the South, Central and North SoSh zones but stable in the North SlSh areas.
Prices of most imported commodities declined slightly in most SoSh markets in December 2012. Compared to the same period last year, imported commodity prices are significantly lower. The decline in prices of imported food is mainly attributed to the strengthened SoSh and improved port functioning.
Livestock prices either remained stable or declined slightly in most markets except in SlSh regions where they appreciated marginally. The reductions in monthly prices are due to reduced demand following the end of Hajj. Livestock prices are significantly higher than a year ago in all monitored markets as a result of improved body conditions and high demand from ongoing restocking activities.
Labour wages sustained their levels or reduced slightly in many regions in line with seasonal reduction in labour opportunities at the end of harvest in crop producing areas. Labour wages are significantly higher compared to their levels a year ago in most markets.
Terms of Trade (ToT) between labour wage and cereals were mixed, mostly improving on the backdrop of reduced cereal prices. The purchasing power of the poor mostly relying on casual labour has improved over the past year as a result of lower cereal prices, improved local quality goat prices and higher labour wages.
Juba Valley: Prices of imported food reduced slightly, while those of cereals remained stable in December. Monthly cattle prices slightly picked-up but goat prices reduced. The ToT (11Kg/daily wage rate) sustained previous month’s level. Compared to a year ago, prices are significantly lower for imported food and local cereals, whereas they are considerably higher for livestock. Annual comparisons of ToT between labor and cereals also indicate a significant rise.
Sorghum Belt: Monthly price changes indicate a slight reduction for imported food, sorghum and livestock. The ToT between labour and cereals increased by one unit from their November level. Annual price changes indicate a significant decrease for imports and local cereals and a remarkable increase for livestock. As a result, the ToT has almost tripled (22kg/daily wage) in Bay region over the past year; it has increased slightly in the rest of the Sorghum Belt regions.
Shabelle Valley: Monthly prices of imported food, maize and livestock declined. The monthly ToT is nearly at November 2012 levels (14kg for a day’s worth of labour). Prices of most imported commodities and cereals are significantly lower while prices of livestock are significantly higher compared to the levels in December 2011.
Central: Imported food, livestock and local cereal prices decreased slightly in December. Annual comparisons indicate significant decreases in the prices of all items except livestock, which is significantly higher. ToT (rice/ local goat) declined in December 2012 but is significantly higher when compared to the same month last year, currently standing at 58kg/local goat.
Northeast: Monthly price decrease was recorded for sorghum and imported food, while livestock quotations nearly sustained the November levels. Annual price comparisons show significant decline for imported commodities and red sorghum while those of livestock are near December 2011 levels. ToT (rice/ local goat) reduced by 8 percent over the month of December (79kg/local goat) but is significantly higher when compared to the same month in 2011.
Northwest: Prices of imported food and local cereals remained stable while the value of livestock appreciated slightly in December. Compared to December 2011, the prices have reduced for locally produced cereals; imports show mixed trends, while livestock prices are significantly inflated. The monthly ToT between local white sorghum and wages increased slightly but is significantly higher than in the same month in 2011, currently equivalent to about 12kg/daily wage rate.
Banadir: monthly prices of locally produced cereals, imported food reduced moderately but increased for a local goat. With the exception of highly valued goats, prices of imported and locally produced food are significantly below their levels a year ago. ToT cereal (maize/ labour wage) increased by 3kgs to close at 18 kgs/ daily labour rate.
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