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Home , Gode, Harar, Hawassa, Jijiga

Markets and Supply Chain Watch – 07-27 July 2020 WFP

Highlights • Maize prices exhibited a modest increase in some monitored markets due to transport disruptions from surplus to deficit markets, possibly due to unrest in early July. • Prices of other key staples (sorghum, teff and wheat) remained generally stable albeit high, with some items seeing minor increases as availability narrowed due to seasonality and COVID-19 outbreak concerns. • Unrest in early July critically reduced supplies and the availability of fruits and vegetables across Ethiopia. The availability of key staples (maize, sorghum and wheat) was also generally adversely affected but to a lesser extent in the majority of surveyed markets. • Cross-border supply corridors for imported food items remained open. Various supply chains factors in could impact future availability and prices of imported food items in . The steady weakening of the Ethiopian Birr against the US Dollar and cash withdrawal limits appear to have impacted trade dynamics in some Somali Region markets. • Prices of shoats (a hybrid sheep/goat) in Somali Region steadily decreased due to their low export demand in connection with the Hajj cancellation this year. This situation could seriously impact pastoralists’ livelihoods in Somali Region. • Most surveyed markets reported low demand dynamics. That is likely to be an indication of households’ deteriorating purchasing power, possibly because of lost or reduced livelihoods in light of COVID-19 factors.

Upstream Surplus Production Locations Ethiopia • Supplies from the main local grain markets seemed to flow normally after being temporarily blocked in parts of Region. However, traders reported challenges accessing Wellega markets due to transporters being reluctant to visit Wellega, impacting availability and raising maize prices across Ethiopia. SAVING LIVES • The Djibouti corridor remained open for cargo movements, but limited transport CHANGING options and increased transport costs remained a challenge. LIVES

Photo: Erik Hathaway Somalia producing areas and relief food distribution • The south Ethiopia-Somalia border closed again. coupled with lower demand trends. The supply of • The Ethiopia- and central Ethiopia- fresh produce (fruits and vegetables) was Somalia corridors remained open for commercial significantly affected as insecurity blocked the trade. flow from production locations. • The fluctuating US Dollar exchange rate in • Despite the weakening Ethiopia Birr against the Puntland-Somalia, coupled with seasonal US Dollar, markets saw a dip in imported monsoon wind disturbances could temporarily items prices (rice, vegetable oil and wheat flour), impact the availability and prices of food in some attributable to the increased supply and parts of Somali Region. pastoralists' deteriorated purchasing power. In Dolo Ado and , prices for those items Downstream remained stable. Prices of locally produced cereals (maize and sorghum) remained stable in • Despite unrest in early July, normal supplies and all three surveyed markets. Prices of shoats availability of key staples (maize, sorghum, teff steadily decreased due to the weakened demand and wheat) were reported. Shortages of wheat for export, primarily related to the Hajj flour, however, were reported by surveyed retail cancellation. stores. Likely, due to seasonal constraints, supplies of fruits and vegetables were restricted. Traders generally reported decreased demand for Oromia Region () grains compared to pre-COVID-19 trends. • The Adama grain market suffered from a low • Key staple prices remained level or slightly supply because of a transport scarcity, slightly elevated, likely as a result of seasonality. The recovered when the security situation improved. nominal prices of maize and teff are at a historic The low supply and availability of maize in Adama high. markets, mainly caused by farmers competing with consumers for seeds ahead of the Meher , , , and Haromaya planting season, is expected to continue in the • Following unrest in Oromia Region, there were coming weeks. Despite the low availability of restricted flows of staple cereals (maize and teff) grains, traders reported low demand trends. from surplus areas. Uncertainty also meant Seasonal reasons explain the low availability of distributors stopped extending credit to traders, vegetables. favouring cash. This trend could place pressure on • Despite low availability, there were no significant the availability of staples. Transport costs price increases for sorghum, teff or wheat. reportedly increased due to the limited However, maize prices rose by 13 percent in July. availability and reluctance of transporters. The Vegetable prices remained high but stable, due to supply of imported food items (oil, pasta, rice, low supplies caused by the season. wheat flour and rice) along the Djibouti corridor Trends of Staple Cereals in Adama (Birr/kg) flowed freely to markets in and around Dire Dawa and Harar. 40.0 • The prices of staples started increasing, 35.0 compounded by seasonality, while imported food 30.0 item prices remained stable. Prices of maize increased from a stable level in June, likely due to 25.0 limited transportation and increased 20.0 transportation costs relating to instability at source markets. 15.0 10.0 Somali Region (Dolo Ado, Gode and Jijiga) • Dolo Ado, Gode and Jijiga markets reported Apr W1 Apr W2 Apr W3 Apr W4 Apr Jul Wk1 Jul Wk2 Jul Wk3 Jul Wk4 Jul May Wk2 May Wk3 May Wk4 May June Wk1 June Wk2 June Wk3 June Wk4 June normal availability of imported staples (pasta, rice Wk1 May and wheat flour). Imported food items continued Maize white Wheat white to arrive from Somalia. There was increased Sorghum white Teff Mixed (Sergegna)

availability of maize and sorghum from surplus Wheat Flour Rice

Contact: [email protected] (Dessie) Southern Nations, Nationalities, and People's Region • 's markets observed normal supplies of key () staples (sorghum, teff and wheat). There was a • Unrest in surplus-producing grain areas of Oromia supply break for white maize from Wollega disrupted the flow of grain. However, maize market because of unrest in July while the supply supplies were impacted primarily due to and availability of other staples remained normal. transporters' reluctance to travel to surplus- • Prices of key grains remained stable with only producing Wolega for fear of encountering slight increases for mixed teff and white maize. security challenges. As with other areas, transport costs to some source markets increased as (Mekele and Shire) compensation for possible security risks. On the • Despite relaxed COVID-19 movement restrictions, other hand, thousands of newly arrived displaced the supply and availability of grains appeared to people in Hawassa town revived the demand for stabilize. Supplies from other regions continued grains in Hawassa market that had been steadily albeit with some transport slowed by transporters depressed after the onset of COVID-19. having to quarantine. The overall availability and • The prices of staple grains slightly increased supply of fruits and vegetables improved in July. except for maize which significantly increased due • The prices of key staples (maize, sorghum and to limited supply and high demand. Maize prices teff) significantly increased while edible oil prices rose for three consecutive weeks. remained relatively stable due to a constant supply. Prices of fruits and vegetables also Gambella Region (Pugnido and Gambella markets) increased, especially onions and tomatoes. • The overall supply of key staples improved in markets around the Pugnido refugee camps. Afar Region (Asayita, Birhale and Semera) However, refugees were lalrgely unable to access • Quarantine requirement for people entering the markets due to insecurity. Gambella markets Tigray Region caused delays in the flow of goods reported a normal supply of grains. and creating a market supply shortage. WFP's • Major cereal prices (maize, rice and sorghum) emergency relief activity and contributions to the either remained stable or decreased. Teff prices Productive Safety Net Programme (PSNP) increased by 6 percent in July. contributed to meeting the supply gap in markets. Available fruits and vegetables tended to be of Shoat-to-Maize Terms of Trade (ToT) (Dolo Ado, poor quality due to the long transport times. Gode and Jijiga) Supplies of local and imported food items to • The shoat-to-maize ToT steadily decreased since Asayita market remained normal as food is the beginning of June, primarily because of moving between Amhara and Oromia Regions demand slump for shoats to export. The majority without restrictions. of shoat exports were in the months leading up to • The prices of local grains (sorghum, mixed teff the Hajj season. However, with the Hajj and wheat) and imported items (pasta, sugar and cancellation due to COVID-19 came less demand wheat flour) remained stable in Asayita market. In for shoats. Pastoralists reliant on livestock sales Berehele, the price of maize increased by 11 saw their purchasing power significantly diminish. percent in July. The prices of onions and tomatoes spiked by 50 to 60 percent compared to May. Wage-to-Maize ToT • The purchasing power of daily labourers is highest Benshangul Gumez (Assosa) in , followed by Jijiga, Pugnido and Gode. • The availability of grain staples remained normal, A daily labourer in Mekelle could buy 25 kg of and after transport blockages were removed, the maize with one day's wage. On the other hand, supply improved. Due to insecurity in Oromia wage labour is the least rewarding in Hawassa, Region, some traders sourced grains from followed by Harar, Chiro and Haromaya. A daily alternative routes in Amhara Region. The wage in Hawassa could fetch only 8 kg of maize. availability of onions, sugar and tomatoes The wage-to-maize ToT in Hawassa, Assossa and continued to be low due to supply cuts from Nazareth plummeted after the onset of COVID-19 Sudan. in Ethiopia. Dessie and Diredawa have observed • Grain prices slightly increased while onion and stable wage-to-maize ToT since the beginning of sugar prices remained high due to shortages. April. Tomato prices slightly dipped. Contact: [email protected] Wage to Maize Terms-of-Trade Frequency of Replenishment by Commodity

Jijiga

Gode

Shire

Gambella

Nazreth

Assossa

Chiro

Hawassa 0 5 10 15 20 25 30 Outlook Exchange Rate • The key trade dynamics identified in the surveyed • The exchange rate of the Ethiopian Birr against markets were the onset of the lean season, the US Dollar in the parallel market slightly dipped increases in transport costs, and lower demands. after the onset of COVID-19; however, it has These factors will likely continue to impact prices. moved upwards since May. The exchange rate is • The general upward trend of maize prices, the around 31 percent above the official exchange cheapest high-calorie food source for poor rate. This finding may exacerbate inflation on the populations, is likely to contribute to a worse food prices of imported food items. security situation. • Household access to food and incomes from Availability, Stocks and Restocking Trends livestock declined in Somali Region because of the • Interviewed traders generally indicated that they slump in export opportunities. The purchasing keep a one-week stock of grains. Grain stocks power of pastoralists in the region may further were reportedly replenished weekly, with a few deteriorate if the trend continues. traders replenishing stocks every two weeks. • The weakening Ethiopian Birr against the US There are several factors impacting traders' Dollar in the parallel market is likely to induce stocking trends, including government regulations inflation on imported food items. and price volatility. • As the lean season progresses, prices of locally produced staples will likely increase seasonally. Given that the rainy season comes between Stock Level by Commodity households' food stock depletion and the next harvest, those relying on markets to access food are likely to face the brunt of price increases and shortages on the market. • Markets, where WFP has cash assistance activities, have not over or under functioned compared to other markets. Food prices will continue to be monitored closely in case transfer value adjustments are required.

Markets Covered • Adama, Addis Ababa, Asayita, Assossa, Birhale, Chiro, Dessie, Diredawa, Dollo Odo, Gambella, Gode, Harar, Haromaya, Hawassa, Jijiga, Mekele, Pugnido, Shire. • More supply chain information is available in this dashboard.

Contact: [email protected]