Issue 24|09 September 2020 Price Monitoring for Food Security in the Kyrgyz Republic

This issue of the Price Monitoring Bulletin was prepared based on the operational daily food price data collected by the National Statistics Committee from 18 markets across the country and disaggregated at province level as the average value (Chuy province - , Kara- Balta; province - Osh, Uzgen, Kara-Suu and Nookat; Talas province - Talas and Manas; province - Naryn and Chaek; province - Batken and Isfana; Jalal-Abad province - Jalal-Abad, Toktogul and Kerben; Yssyk-Kul province - and ; and city). The analysis is based on a secondary data review. Highlights SITUATION UPDATE: Since March 2020, the COVID-19 global pandemic has pushed countries to adopt restrictive measures, including the closure of borders. Since the dramatic increase of COVID-19 cases in country in July 2020, the situation is now slightly improving (71 daily cases on 10 September). The economic recovery of the Kyrgyz Republic is still largely influenced by external economic conditions and factors that have come about against the background of measures to counter the spread of the coronavirus infection. Despite the gradual recovery of economic activity in the world, the situation remains uncertain. It is expected that the return of economies to pre-crisis levels will take longer than previously predicted. The indicators of the real sector of the economy of the Kyrgyz Republic continue to be in the negative zone, reaching their lowest values over the past few years. The dynamics of inflation is continuing its downward trend despite intensified disinflationary factors. As of 14 August 2020, the annual inflation rate fell to 4.9 percent after reaching its peak in April of this year. The downward trend of inflation is being driven by weak domestic demand along with the saturation of the market with seasonal goods and the relative stabilization of the national currency. The availability of staple food commodities has remained stable in the country due to its membership within the EAEU and its existing regional export bans. The following section discusses the average prices for the two weeks from 26 August to 9 September 2020 in comparison to the previous two weeks, February 2020 (before the COVID-19 outbreak began in the country) and August 2020. The weekly monitoring of food prices continues to reveal the stability of market prices with some price fluctuations of several commodities: • WHEAT: During the week from 26 August to 9 September 2020, the national retail prices of wheat remained stable from the previous two week’s levels at a biweekly average of 20.57 KGS/Kg. The biweekly prices remained stable from August levels and remained 8 percent higher than February 2020 levels. As of 9 September 2020, the highest price of wheat was observed in Jalal-Abad and Batken provinces (24 KGS/Kg) and the lowest price was in Talas province (17 KGS/Kg). • WHEAT FLOUR (1st grade): The national retail prices of wheat flour stood at a biweekly average of 39.35 KGS/Kg and remained stable from the previous two week’s levels. The prices remained stable from August levels and 18 percent higher than February 2020 levels. As of 9 September 2020, the highest price was in Talas province (47 KGS/Kg) and the lowest was in Naryn province (34 KGS/Kg). • POTATOES: The national retail prices of potatoes decreased by 4 percent from the previous two week’s levels at a biweekly average of 21.96 KGS/Kg. The prices were 5 percent lower than August levels following the availability in markets of freshly harvested potatoes and have remained stable from February 2020 levels. The highest decrease on a biweekly basis of potato prices was observed in Naryn province (-14 percent). As of 9 September 2020, the highest prices were observed in Osh and Batken provinces (23 KGS/Kg), while the lowest price was in Yssyk-Kul province (18 KGS/Kg). • SUGAR: The national retail prices of sugar stood at a weekly average of 45.42 KGS/Kg and remained 2 percent higher from the previous two week’s levels. The prices of sugar remained 2 percent higher than August levels and 11 percent higher than February 2020 levels. As of 9 September 2020, the highest price was observed in Batken and Osh provinces (48 KGS/Kg), while the lowest price was in Yssyk-Kul, Naryn and Chuy provinces (43 KGS/Kg). • MEAT (BEEF and MUTTON): The national retail prices of meat stood at a weekly average of 366.59 KGS/Kg for beef and 354.58 KGS/Kg for mutton, and prices increased by 2 percent for beet and by 1 percent from the previous two week’s levels. The prices for beef and mutton remained 2 percent and 1 percent, respectively, higher than August levels and 5 percent and 10 percent higher than February 2020 levels, respectively. As of 9 September 2020, the highest price for beef was observed in Osh province (374 KGS/Kg) while the highest price for mutton was also in Osh province (385 KGS/Kg). EXCHANGE RATE: During the two weeks from 26 August to 9 September 2020, the Kyrgyz som slightly depreciated from 77.95 KGS to 78.73 KGS per 1 USD, the Russian ruble depreciated from 74.51 RUB to 75.56 RUB per 1 USD and the Kazakh tenge depreciated from 419 KZT to 424 KZT per 1 USD. However, these currencies depreciated by 13 percent, 13 percent and 11 percent, respectively, against the US dollar since the beginning of March 2020, according to the exchange rate of the National Bank. Currency movements are one of the main driving forces of the retail prices of imported basic food commodities including wheat, vegetable oil and sugar. GLOBAL OIL PRICES: Since the beginning of 2020, crude oil prices have slumped dramatically following lockdowns and travel restrictions with the spread of COVID-19 and the decline of consumer demand, further impacting the global economy. Despite the coronavirus pandemic and the global oil forecast, the recovery of the demand side of oil led to slightly higher sales though the recovery continued to stagnate. According to global forecasts, the full recovery of oil demand levels may take until 2022. During the week from 24 to 31 August 2020, WTI increased from 42.44 USD per barrel to 42.61 USD per barrel, while Brent prices increased from 44.43 USD per barrel to 45.22 USD per barrel. As of 9 September, both WTI and Brent prices remained 10 percent and 14 percent lower, respectively, than March 2020 levels. AVAILABILITY: As of 4th of September 2020, 20 out of 40 districts show good levels of availability of wheat and wheat flour, but the situation remains critical in the southern districts of , northern districts of , in the districts of (apart for Moskva, Sokuluk and Alamedin) and in the Aksy District and Bazar-Korgon District, where the amount in stock can satisfy less than a quarter of the population. 11 districts show sufficient levels of vegetable oil and only 9 have enough sugar stocks.

Trends of Retail Prices of 12 Staple Foods (Weekly Trends) - Kyrgyz Republic 26 Aug - 9 Sep 12 - 26 Aug 26 Aug - 9 Sep 12 - 26 Aug 2020 (KGS/kg) 2020 (KGS/kg) Trend 2020 (KGS/kg) 2020 (KGS/kg) Trend Bread (1st grade) 47.36 47.36 0% Rice (medium) 80.26 80.20 0% Milk 34.91 34.88 0% Sugar 45.42 44.68 2% Meat (beef) 366.59 358.17 2% Wheat 20.57 20.61 0% Meat (mutton) 354.58 350.80 1% Wheat flour (1st grade) 39.35 39.35 0% Oil (cooking) 100.49 100.25 0% Wheat flour (high-grade) 46.50 46.61 0% Potatoes 21.96 22.83 -4% Eggs 75.92 76.20 0% Price Monitoring for Food Security in the Kyrgyz Republic Issue 24 | 09 September 2020

WHEAT Pic 1. Retail wheat prices (KGS/Kg) Pic 2. Growth rate of wheat, as a percentage of the daily prices from the previous average monthly price

SUGAR

Pic 3. Retail sugar prices (KGS/Kg) Pic 4. Growth rate of sugar, as a percentage of the daily prices from the previ- ous average monthly price

POTATOES

Pic 5. Retail potato prices (KGS/Kg) Pic 6. Growth rate of potato, as a percentage of the daily prices from the pre- vious average monthly price

EXCHANGE RATE GLOBAL OIL PRICES

Pic 7. Exchange rates of Ruble, Kyrgyz Som and Kazakh Tenge against US Pic 8. Daily WTI, Brent prices (Jan 2020 to 31 Aug 2020) Dollar Price Monitoring for Food Security in the Kyrgyz Republic Issue 24 | 09 September 2020 Annex: Prices of 13 Food Commodities

The table shows the changes of the average retail prices of the current day, current week and current month compared to the average prices of the previous month. Price Monitoring for Food Security in the Kyrgyz Republic Issue 24 | 09 September 2020 Annex 2: Availability of 3 main food commodities

The Maps below show the level of availability/sufficiency of three main staple food at district level: wheat and wheat flour, vegetable oil and sugar that are monitored by the Ministry of Agriculture, Food Industry and Melioration. WHEAT AND WHEAT FLOUR Out of 39 districts for which data is availa- ble, 20 have sufficient wheat and wheat flour stocks to cover over 50 percent of their population for one month (considering aver- age person physiological needs of the com- modity under consideration). Among these 20, 15 districts are able to satisfy the needs of their entire population for more than one month. On the contrary, wheat and wheat flour stock levels are particularly critical in Ak-Su district in Yssyk-Kul province, Bakai- Ata district in Talas province, Ak-Tala, Jum- gal, Kochkor districts in Naryn province, Aksy, Toktogul and Bazar-Korgon districts in Jalal-Abad province, Alay, Chon-Alay, Nookat, Aravan, Kara-Suu, Kara-Kulja dis- tricts in Osh province, and Panfilov, Jayil, Sokuluk, Yssyk-Ata, Chuy and Kemin districts in Chuy province. OIL (COOKING)

Regarding vegetable oil, only 11 districts (Chatkal, Kara-Buura, Bakayi-Ata, Sokuluk, Suzak, Uzghen, Toguz-Torous, At-Bashy, Ton, Dezhety-Oghuz and Ak-Su) have sufficient levels to satisfy more than half of their pop- ulation’s monthly needs. As the maps shows, almost all of Osh and Chuy regions face a severe insufficiency in vegetable oil.

SUGAR In regard to sugar availability, all the districts in Batken, Osh, Jalal-Abad and Naryn region (At-Bashy being the exception) face insuffi- cient levels of sugar stocks. In this case, only 9 districts have sufficient sugar availability with 7 out of 9 districts being able to satisfy their population’s sugar needs for more than one month.