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LIBERIA MARKET PRICE MONITOR a Monthly Price Analysis of Food and Other Essential Commodities

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LIBERIA MARKET PRICE MONITOR a Monthly Price Analysis of Food and Other Essential Commodities BULLETIN 27 July 2012 LIBERIA MARKET PRICE MONITOR A monthly price analysis of food and other essential commodities INTRODUCTION This 27th edition of the Liberia Market Price Monitor1 summarizes the price changes for commonly consumed staple foods as well as other essential non‐food commodities that have potential of being exchanged for food between May and July 2012. The Liberia Market Price Monitor aims to inform stakeholders on the changes in food price over time, at different locations and in different seasons; and on how prices of staples change relative to other local commodities that are key sources of income for vulnerable households. Highlights • Currently, retail prices of the basic staple, rice are substantially higher (22 percent) than the same period in 2011 in most parts of the country, though relatively stable since April 2012; • The refugee hosting county of Grand Gedeh continues to witness huge increases in prices of basic commodities including that of rice that rose up by 6 percent between May and July 2012. Palm oil and gasoline prices were up by 17 and 23 percent higher than the same period of last year. • World rice prices remain firm with a slight drop in July 2012, mainly attributed to good export availability and stable demand, though continued stock uncertainties may lead to global price volatility; • Meanwhile, the cereal market is already signaling the impact of the ongoing drought in USA heightening renewed threats of another round of global rise in food prices; • Casual laborers continue to experience decline in their food purchasing power as a result of the relatively high prices of imported rice with the worst affected county being Grand Gedeh due to double pressure on wage rate by the refugees; • Food security situation of the vulnerable households in parts of southeastern Liberia—mainly Grand Gedeh remains precarious as the region awaits the harvest season in the coming two months. NOMINAL”WHOLESALE” PRICE OF IMPORTED RICE Table 1: Nominal Price changes for 50kg bag of imported "Parboiled" rice in LD The current domestic price of a (July 2011 ‐ July 2012) 50kg bag of imported rice is Change from Change from substantially higher than last Jul‐11 May‐12 Jul‐12 one month one year year’s price with exception of earlier earlier Pleebo market. In the previous Bo‐Waterside 2,612 2,688 3% three months, Pleebo witnessed Buchanan 2,233 3,295 3,317 1% 49% entry of cheaper varities of rice Gbarnga 3,036 2,810 ‐5% from Ivory Coast into the Pleebo 2,992 2,965 2,929 ‐4% ‐2% market. Table 1 shows that Red Light 2,351 3,042 3,026 ‐1% 29% Toe Town 3,325 3,238 15% there has been a price rise of Tubmanburg 2,250 3,133 2,564 ‐18% 14% upto 49 percent above the July Voinjama 2,983 3,167 2,564 9% 2011 prices in some markets. On Zwedru 2,717 3,425 3,640 6% 34% average, the price for a 50kg bag 1 The market price monitoring is a component of the Food Security and Nutrition Monitoring System as coordinated by the Food Security and Nutrition Programme at the Ministry of Agriculture, with technical support and funding from the World Food Programme (WFP). Prices are collected by the county staff of the Liberia Institute of Statistics & Geo-Information Services (LISGIS) in 11 of the largest food markets in 9 different counties. 1 BULLETIN 27 July 2012 LIBERIA MARKET PRICE MONITOR A monthly price analysis of food and other essential commodities of imported parboiled rice is 22 percent higher than a year ago. RedLight in Monrovia and Buchanan markets as well as Zwedru Market have witnessed the most dramatic price increases over the period. In the past years, price of imported rice has been substantially lower in Monrovia and Buchanan (the two major ports) compared to rural markets. Monrovia being the main entry port for imported commodities, prices usually mirror the global price changes while the hitherto huge price differentials between interior markets and the entry port have been moderated by the ongoing improvement in road conditions. Grand Gedeh (Zwedru) on the other hand hosts the highest number of refugees—nearly a third of the population in that county. Notable is also the fact that it is still cheaper to purchase imported rice in markets around central Monrovia than in rural markets in the northwest, southeast parts of Liberia. The month by month comparison shows that with exception of Grand Gedeh that showed an upsurge in price by 6 percent, the rest of the markets showed relatively stable prices between May and July 2012. The rising prices in Grand Gedeh is linked to the huge demand due to the continued presence and concentration of refugees in the locality. Imported rice is available in all markets within the country with exception of Foya, Lofa County where substantial amounts of local rice has replaced the imported varieties. According to the Ministry of Commerce and Industry (MOCI) report for rice stocks as at July 28, 2012, the existing stock levels stand at about 77,000 MT while pending order are estimated at 35,890 MT. MOCI estimates that this stock is likely to meet the consumption requirements through to end of December. However, the in‐country distribution remains a challenge and the remote areas may still find it difficult to access the available rice—mainly due to poor transportation networks in addition to the low purchasing power of vulnerable households. GLOBAL TRENDS IN PRICE OF RICE The July FAO’s forecast for world cereal production in 2012 stands at 2,396 million MT, some 23 million MT less than the June 2012 forecast (though still 2% higher than 2011’s highest). FAO forecasts maize production to reach 1,229 million MT. The dampened forecast is explained by the deteriorating crop conditions occasioned by the prevailing drought in the major production regions of USA. The grain prices were very volatile in June, with adverse weather conditions in the US as the main driver. The 2012 world production of rice is expected to grow by 1.6 percent to 489 million MT, slightly lower than the previous forecast of 491 million MT—reflecting deterioration of prospects mainly in India. Rice production is likely to outpace consumption by some 13.4 million MT. However, there is also a likelihood of revival of purchases by a few importing countries such as Bangladesh, Nepal, Philippines etc. The FAO Cereal Price Index averaged 221 points in June, unchanged from May and down 45 points (or 16.8 percent down) from its peak of 265 points in April 2011. The FOB price of the Thai super broken rice (a common variety in the Liberian markets) slightly declined from USD 575 in June to USD 550 in June 2012. In coming months rice export prices are likely to be volatile, with the market moved by two phenomena:‐on one hand, the ample stocks in Thailand could keep prices low, whereas the uncertainties about continued export availability in India could lead to upward pressure on the other hand. Pressure on prices could also emanate from the volatility of the cereal prices resulting from impact of the ongoing drought in USA. However, the developments in the drought situation in USA will play a central role in explaining the global cereal prices in the coming months. This necessitates a close watch especially in countries dependent on imports of cereal commodities. 2 BULLETIN 27 July 2012 LIBERIA MARKET PRICE MONITOR A monthly price analysis of food and other essential commodities PRICES OF OTHER COMMODITIES In July 2012, the price of palm oil either Table 2: Price of 1 gallon of palm oil in Liberian Dollars (July 2011 ‐ July 2012) slightly dropped or remained stable % Change compared to two months ago, and was two % Change cheapest in Gbarnga followed by Red months one year Light and Buchanan markets (Table 2). Market Jul‐11 May‐12 Jul‐12 ago ago The exception was Pleebo market that Bo‐Waterside 476 484 2% has witnessed the most dramatic price Buchanan 350 360 350 ‐3% increases (44%) since the same period in Gbarnga 258 300 300 0% 16% 2011. Maryland reports increased trade Pleebo 275 363 396 9% 44% on palm oil with Ivory Coast—an Red Light 326 350 347 ‐1% 6% Tubmanburg 320 375 350 ‐7% 9% observation that may explain the Voinjama 447 433 ‐3% dramatic price increases. Palm oil prices Zwedru 383 450 450 0% 17% are usually lower during this period of the year as it coincides with the peak of harvest season, that result in large quantities of palm nuts on the markets. Meanwhile, the price of a gallon of palm oil is higher than the same period last year, an upward trend that has continued since 2009. Major increases in prices have been observed in Pleebo (44%), Zwedru (17%) and Gbarnga (16%). This upward trend has mainly been explained by the increasing regional demand for palm oil. Table 3: Price of 1 gallon of gasoline in Liberian Dollars Gasoline prices also have profound (July 2011 ‐ July 2012) % Change impact on household budget. It impacts two % Change on transportation costs which also months one year affects prices of basic commodities. Markets Jul‐11 May‐12 Jul‐12 ago ago Since May 2012, all domestic markets Bo‐Waterside 398 353 ‐12% have witnessed a slight decline with an Buchanan 333 373 370 ‐1% 11% exception of Zwedru Market (Table 3). Gbarnga 340 376 339 ‐10% 0% The average price for a gallon of Pleebo 497 445 440 ‐1% ‐11% gasoline decline from L$384 in May Red Light 325 345 321 ‐7% ‐1% 2012 to L$379 (about 1.3% decrease) a Tubmanburg 323 360 330 ‐8% 2% year ago.
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