Market Data Update January, 2013
Issued: February 22, 2013
• Inflation: The January Consumer Price Index (CPI) declined slightly in South-Central while remaining relatively stable in all other regions of the North. Annual inflation reduced in Somali shilling (SoSh) areas but increased somewhat in the regions using Somaliland shilling (SlSh). The minimum cost of living is significantly higher in SoSh zones whereas it is moderately elevated in SlSh area when compared to the base period (March 2007).
• Exchange rate between SoSh and the US Dollar (USD) gained marginal value over the first month of the year while the SlSh lost negligble ground to the greenback. Over the past year, SlSh has remarkably depreciated against the USD, while the SoSh has gained value. The annual appreciation of the SoSh is attributed to economic renaissance in the capital (Mogadishu), relative stability in most parts of the country, limited supply of the local currency notes and dollar inflows through humanitarian interventions and on-going foreign and local investments predominantly 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 significantly in the key sorghum producing regions of Bay; slightly reduced in Juba, Central, Gedo and Hiran regions but remained relatively steady in all other regions. The decline in locally produced cereals mainly reflect good outturn of the 2012/13 Deyr seasonal harvests. Other factors affecting current cereal price trends included: increased cereal flows from surplus markets to deficit markets, low prices of imported food and humanitarian food supply. Overall, cereal prices remained well below the levels a year earlier.
• Prices of most imported commodities continued to decline in January in nearly all SoSh markets while remaining relatively stable in SlSh areas. Compared to the same period last year, imported commodity prices are significantly lower in SoSh markets but stable in SlSh regions. The decline in prices of imported food is a result of the appreciation of the local currency, enhanced port functioning and humanitarian assistance
• Livestock prices remained stable to declining in most markets when compared to a month ago, in line with a seasonal pattern following the end of Hajj exports. Livestock prices are significantly higher than a year ago in all monitored markets as a result of improved body conditions and restocking.
• Labour wages sustained their levels or reduced slightly in many markets in line with seasonal reduction in agricultural labour opportunities after harvests 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 stable or decreased with the exceptions of increases in Bay and Juba. 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, cereals and livestock declined slightly in January. The ToT (12Kg/daily wage rate) was one unit up from the 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 improvement in purchasing power for casual labourers.
• Sorghum Belt: Monthly price changes indicate reduction for imported food, sorghum and livestock. The ToT between labour and cereals decreased by one unit from end year levels as labour rates slumped. Generally, annual price changes indicate a significant decrease for imports and local cereals and a remarkable increase for livestock. More specifically, the ToT doubled (24kg/daily wage) in Bay region over the past year, increased significantly in the Hiraan but remained stable in Gedo while it declined in Bakool.
• Shabelle Valley: Monthly prices of imported food and livestock declined while maize quotations appreciated. Slight increament in labour wages could not keep pace with inflated cereal costs, consequently reducing the January ToT by one unit (13kg 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 January 2012.
• Central: Imported food, livestock and local cereal prices decreased slightly in the opening month. Annual comparisons indicate significant decreases in the prices of all items except livestock, which is significantly higher. ToT (rice/ local goat) declined but is significantly higher when compared to the same month in 2012, currently standing at 56kg/local goat.
• Northeast: imported food prices declined marginally while those of livestock and sorghum were up with a small margin. Annual price comparisons show significant decline for imported commodities and red sorghum while those of livestock are slightly higher. ToT (rice/ local goat) were down one unit from December 2012 level (78kg/local goat) but is significantly higher when compared to the same month in 2012.
• Northwest: Prices of imported food and livestock remained stable while the cost of local cereals were mixed. Compared to January 2012, the prices have reduced for locally produced cereals; imports show mixed trends, while livestock prices are significantly higher. The monthly ToT between local white sorghum and wages remained steady but is significantly higher than in the same month last year, currently equivalent to about 12kg/daily wage rate.
• Banadir: Monthly changes in prices of imported food and goats show a moderate decrease; locally produced cereals remained stable . 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) was one unit down from the preceding month to close at 17 kgs/ daily labour rate.
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