Opinion

Sky-rocketing prices creates food insecurity and raises new vulnerabilities

 

In the last four or so years the hike in basic commodities has continued unabated without a solution. It changes from time to time according to the World Food Program (WFP) monthly market reports outlining the need for a solution to save the larger affected population in the country. The only way out for now is to regulate the open market, increase and improve internal production of basic items.

 A major food crisis has enveloped South Sudan and continues to deteriorate at an alarming rate. In the first half of 2015, the prices of basic food commodities consistently increased, resulting in a nearly 30 percent rise in the cost of the minimum expenditure food basket. One worrying result is that now most urban poor people are spending up to 85 percent of their income on food, having an enormous impact on their food security.

FAO is supporting the relevant government institutions to enhance data collection, analysis and reporting on market trends in South Sudan through the program Agriculture and Food Information Systems for Decision Support (AFIS), which is funded by the European Union and the Government of Australia. The program’s activities facilitate a constant stream of basic data, such as price fluctuations in staple foods, which is used as the foundation for evidence-based decision-making.

Food prices this year are particularly critical to mitigate worsening food insecurity for millions of South Sudanese, including 4.6 million people in Integrated Food Security Phase Classification “Emergency” and “Crisis” phases. The urban poor – with their overdependence on markets coupled with insecure, inconstant and low-paying jobs – are the hardest hit by the recent economic crisis. An estimated 610 000 people, more than half concentrated in Juba and Wau, have severely undermined livelihoods.

Grace, 35, a mother of four, explains, “my cost of living in Juba has almost doubled. As a security guard I earn SSP 500 (USD 50) a month, and in December 2014 I could sell one of my goats and buy 71 kilos of maize flour, now it is only 38 kilos. Now I am spending all my income on food.”

AFIS’s recent analysis shows that prices have increased because import costs have soared, following significant devaluation of the local currency against the US Dollar. The official exchange rate is fixed at a constant SSP 2.95/USD, while the informal market exchange rate is on the downfall, currently at an all-time record low of SSP 10–17/USD.

South Sudan relies significantly on imported commodities from neighbouring Kenya, Sudan and Uganda. The devaluating local currency deters traders from importing cargo, paralyzing the supply chain network. This is compounded by high insecurity for traders and transporters moving goods along certain routes, which has significa Monthly Market Price Monitoring Bulletin, a year ago

 

 Inflation: According to the National Bureau of Statistics, the South Sudan inflation rate measured by the changes in consumer price indices stood at 371.8% while the inflation rates were 345.8% and 303.9% respectively for Juba and Wau in January 2017.

   Exchange Rate: The South Sudanese Pound (SSP) lost further ground to the US Dollar in February. In Juba, SSP was exchanging at 111 SSP/US$ in the black market, an increase of 11% compared to January, while the official rate being 100 SSP/US$. This parallel exchange rate in February was 264% higher than it was one year ago. The continued depreciation of local currency triggered importers and big capacity traders to keep their money in US $ as coping strategy to maintain money value.

 Fuel Supply and Prices: In February, fuel continued to be scarce in most parts of the country despite some improvement in supplies in major towns such as Juba and Wau. Compared to a month ago, retail prices of petrol in black market increased by 40% to 58% in Yida, Bor and Warrap; other monitored markets experienced increases of 20-30%.

 Staple prices: Compared to January, prices of white sorghum and white maize have increased in Bor, Yida, Agok and Torit markets in the ranges of 10-25%, while they have remained the same or decreased somewhat in Aweil, Bentiu, Wau and Rumbek. There has been a huge surge in staple prices in different markets compared to a year ago. Most notable increase in sorghum prices are in Bor (738%), Konyokonyo (587%), Wau (472%) and Lakes (461%).

 Alarming price levels in Kapoeta: White maize price has increased by 228% compared to a month ago, and this price in February is almost 20 times (increase of 1,876%) compared to the same time the previous year.

 Similarly, price of Janjaro has increased by 76% and wheat flour by 40% compared to the previous month.

 Cooking oil: Prices in Konyokonyo, Aweil, Torit, Wau and Yida experienced increases of 10% to 25% compared to the previous month, while they have been relatively stable in most other monitored markets.

Terms of trade: Compared to January 2017, goat to white sorghum TOT has deteriorated in Bor and Aweil that are associated with decreased prices of goat. On the other hand, skyrocketed maize grain price in Kapoeta South led goat to maize grain TOT to deteriorate by 50%. Deterioration in TOT impacts negatively the purchasing power of livestock dependent households.

 

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