Food Security and Price Monitoring 16-09-2020

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Yemen | Food Security and Price Monitoring 1-14 August 2020 Continued instability in the foreign exchange market and further depreciation of the rial have Exchange Rate direct implications on food prices and will lead to an escalating food security crisis in Yemen. Highlights Recently, Assessments Capacities Project (ACAPS) assigned a high probability to the risk of Since the division of the Central Bank of Yemen (CBY) in Aden and the CBY in Sana’a, the The food security situation in Yemen continues to be alarming, driven by inflation sparked by rapid depreciation of the rial and revised the risk upwards to “medium/high”.4 country has been suffering from detached and contradicting monetary policies. In effect, ongoing conflict and the combination of cumulative deterioration in macroeconomic two currencies are in place and the divergence between them increased to 160 rial in Meanwhile, the exchange rate in areas under the control of the Sana'a-based authorities was conditions, implications of COVID-19, reduction in food assistance and the fuel crisis mid-August and further to nearly 200 rial at the end of the month. This is reflected on the relatively static during the first half of August. The CBY Sana’a enforced a number of controls to in areas under control of Sana’a-based authorities, and recently by flash floods discount rates applied to financial transfers between the south and north of Yemen, which limit speculations on the rial in the north, including banning the direct or indirect sale of foreign across the country. increased to 30-35 percent in August 2020. currency to importers of fuel, food and building materials through exchange offices and “financial The Yemeni rial continued to depreciate in areas under the control of the networks”. Also, CBY Sana’a announced the reactivation of its checks’ clearing house for foreign Following the relative stability in exchange rates during the second half of July, the Yemeni Internationally Recognised Government of Yemen (IRG) during August marking a currency-based transactions between financial institutions.5 The exchange rate remained at YER rial continued to depreciate in areas under the control of the Internationally Recognised new all-time trough value of YER 800/USD 1 at the end of August. The exchange 598/USD 1 in areas under Sana'a-based authorities until mid-August. Government of Yemen (IRG); reaching a low of YER 758/USD 1 in mid-August and rate in areas under the control of the Sana'a-based authorities was however static. further depreciated to almost YER 800/USD 1 at the end of the month, marking a new The cumulative increase in food prices in 2020 remains concerning. However, all-time trough value in the south, well below the 2018 crisis-level benchmark. Since the monthly inflation in food prices slowed down in IRG areas. Inflation in the cost of beginning of 2020 and until end of August, the rial has lost 25 percent of its value, adding the Minimum Food Basket has already crossed the 2018 crisis level to the cumulative depreciation and leading to losses of the rial by 70 percent of its value 1 benchmark by 15 percent and reached YER 6,318/person/month in IRG areas. compared to pre-war levels. The risk of further depreciation during the coming months Purchasing power is gradually eroding; 58 percent of households with poor food is high due to unpredictable improvements in the main sources of foreign currency access reported in July that unemployment or reduced wages are key shocks for and consequently the levels of foreign currency reserves. them (see figure 17). The Cash Consortium Yemen attributed rapid depreciation of the rial during June-August to In areas under IRG, inadequate food consumption increased by 9 percentage various factors, including clashes between the Southern Transitional Council (STC) and the points in three months to 39 percent in July. IRG, excessive printing of new notes by the CBY Aden, limited availability of foreign The fuel crisis continued in areas under the control of Sana’a-based authorities currency in the local market, active engagement of currency brokers in the foreign with a slight improvement in availability and prices of petrol and diesel, yet with 19 exchange market, and, the implications of COVID-19 on markets and livelihoods, the vessels not allowed to enter into Red Sea Ports.2 Prices of petrol and diesel in IRG near-depletion of the KSA deposit and the sharp decline in remittances.3 The IRG has areas were increased by 15 and 35 percent respectively during the month leading to received approval to use USD 61.5 million of the remaining balance of the KSA deposit for mid-August. letters of credit on 9 August which indicates that the KSA deposit is close to full depletion, In July, COVID-19 continued to affect households, challenging their access to while other key sources of foreign exchange remain depressed. With more than 90 percent medical care and work as households reported in mVAM surveys. import dependency for wheat and other food commodities and in the absence of adequate official sources for foreign currencies, importers have to rely increasingly on informal Table 1: Percent change in average prices August Weekly Prices Price Change sources for US dollar that are more expensive than the official and preferential exchange Commodity/Item Unit 1-7 Aug 8-14 Aug 1M 3M 6M 1Y rates. Exch Rate/IRG Areas USD/YER 750 758 -2.5% -9% -14% -23% Areas under Fig 1: Exchange rate (USD/YER) Exch Rate/ Sana’a-based authorities USD/YER 595 598 0.0% 0.1% 0.0% -3% Exchange rate in Aden relatively stabilized during the first half of August,before sliding to an all time high of Minimum Food Basket YER/person/month 5,735 5,760 -0.1% 11% 9% 21% nearly YER 800/1USD at end of the month** IRG YER/person/month 6,313 6,318 -0.2% 20% 18% 32% Areas under Sana’a-based authorities YER/person/month 5,286 5,295 -0.1% 3% 2% 11% 775 758 750 Wheat Flour YER/Kg 320 321 0.7% 12% 13% 19% 725 Rice YER/Kg 972 967 0.1% 4% 9% 11% 700 716 Veg Oil YER/Litre 728 720 -2% 8% 25% 47% 675 Sugar YER/Kg 436 437 2.1% 6% 24% 40% 650 625 Red Beans YER/Kg 959 968 -0.5% 12% 16% 17% 600 Diesel YER/Litre 466 457 4.5% 53% 19% 21% 575 550 598 IRG YER/Litre 424 423 35% 81% 21% 35% Avg Buy Rate USD/YER 525 Areas under Sana’a-based authorities* YER/Litre 498 485 -10% 37% 17% 12% Avg. for areas under control 500 of Sana'a-based authorities Deterioration in food consumption was observed for assisted and non-assisted households. Petrol YER/Litre 418 420 -9% 69% 26% 19% 475 Avg. for IRG areas However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 IRG YER/Litre 312 341 15% 81% 2% 5% 450 Areas under Sana’a-based authorities* YER/Litre 506 487 -18% 62% 36% 29% percent) compared to those assisted (36 percent). Without humanitarian food assistance, the Jul-19 Jul-18 Jul-20 Jan-20 Jan-19 Jan-18 Jun-19 Jun-18 Oct-19 Oct-18 Apr-20 Apr-19 Apr-18 Feb -2 0 Feb -1 9 Feb -1 8 Dec-19 Dec-18 Sep -1 9 Sep -1 8 Jun-20 Aug-19 Aug-18 Nov-19 Nov-18 Mar-20 Mar-19 Mar-18 May-20 May-19 Data source: WFP market data collection; pepcent change in prices reported for 8-14 August 20200, compared to equivalent week in previous months. Alert for May-18 prevalence of inadequate food consumption amongst assisted households would be very high. In

price change >15% for Y/Y, >7.5% for 6m, >3.8% for Q/Q, 1.3% for m/m. W1 Aug-20 W2 Aug-20 * Price of petrol and diesel takes into account black market rates in Hodeidah since mid-June, as both were not available in fuel stations during this period. fact, June and July data show a notable increase in the number of WFP-assisted households 1 Peak values for the commodity prices and the currency exchange rate from the last major economic crisis in October 2018 are taken as a reference benchmark. with inadequate food consumption in areas under the control of Sana'a-based authorities, 2 Data from Yemen Petroleum Company. As of 8 September 2020, this amounts to 485,456 tons of diesel, gasoline and gas, aggravating the crisis situation for fuel in the northern governorates. i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact 3 Cash Consortium Yemen, Flash Update 6: YER Exchange Rate Volatility, 29-August-2020. Prepared by: WFP Yemen CO, VAM unit | 16 September 2020 4 Yemen Risks – Update 25 August 2020, ACAPS. following a reduction in the levels of general food assistance provided in areas under the ** Source: Average daily exchange rate on 31 August, WFP data

Continued instability in the foreign exchange market and further depreciation of the rial have to note that in 2020, no construction material and other cargo than food and fuel were Exchange Rate direct implications on food prices and will lead to an escalating food security crisis in Yemen. discharged at the Red Sea ports.7 In general, the additional COVID-19 precautionary procedures Recently, Assessments Capacities Project (ACAPS) assigned a high probability to the risk of that have led to slow-downs in import clearance processes, adding one month to the duration of Since the division of the Central Bank of Yemen (CBY) in Aden and the CBY in Sana’a, the inflation sparked by rapid depreciation of the rial and revised the risk upwards to “medium/high”.4 regular procedures have been lifted. However, an accumulation of custom clearances could country has been suffering from detached and contradicting monetary policies. In effect, potentially explain some volatility on the import figures in recent months. The fuel crisis, which two currencies are in place and the divergence between them increased to 160 rial in Meanwhile, the exchange rate in areas under the control of the Sana'a-based authorities was erupted in the second week of June has continued to affect markets throughout July and August. mid-August and further to nearly 200 rial at the end of the month. This is reflected on the relatively static during the first half of August. The CBY Sana’a enforced a number of controls to However, the availability of fuel slightly improved towards mid-August through unofficial market discount rates applied to financial transfers between the south and north of Yemen, which limit speculations on the rial in the north, including banning the direct or indirect sale of foreign supply, although has been worsening since then. UNVIM data show a marked decline in the increased to 30-35 percent in August 2020. currency to importers of fuel, food and building materials through exchange offices and “financial networks”. Also, CBY Sana’a announced the reactivation of its checks’ clearing house for foreign volume of fuel imports discharged through the Al Hodeidah and Saleef Ports in June against the Following the relative stability in exchange rates during the second half of July, the Yemeni 8 currency-based transactions between financial institutions.5 The exchange rate remained at YER cleared volume. In July, however, the discharged volume increased to nearly 133,000 mt, which rial continued to depreciate in areas under the control of the Internationally Recognised 598/USD 1 in areas under Sana'a-based authorities until mid-August. accounts for only half of the minimum monthly needs. The managing director of the Sana’a Government of Yemen (IRG); reaching a low of YER 758/USD 1 in mid-August and Petroleum Company indicated that available reserves reached critically low levels during July and further depreciated to almost YER 800/USD 1 at the end of the month, marking a new Food and Fuel Supply warned of a humanitarian crisis if the necessary reserves were not replenished; 250 million litres all-time trough value in the south, well below the 2018 crisis-level benchmark. Since the Key food commodities are generally available in markets. Exceptions were continued shortages of petroleum and diesel are needed to end the current crisis and stabilize the fuel market.9 beginning of 2020 and until end of August, the rial has lost 25 percent of its value, adding of red beans in Socotra, Al Mahra and Shabwa governorates in mid-August in addition to Similar warnings were issued by the Sana’a based Ministry of Transportation in August, to the cumulative depreciation and leading to losses of the rial by 70 percent of its value shortages of wheat flour in Socotra. Data from the UN Verification and Inspection Mechanism highlighting that available stocks may not be sufficient to cover the operational needs of Saleef compared to pre-war levels. The risk of further depreciation during the coming months for Yemen (UNVIM) shows that the volume of monthly food imports discharged at the ports of Al and Al Hodeidah ports, and Sana’a airport may also cease to operate for humanitarian flights in is high due to unpredictable improvements in the main sources of foreign currency Hodeidah and Saleef during July reached 355,334 mt.6 This is the second highest total volume of September. The Red Sea Ports Corporation highlighted that as of 8 September, 19 vessels and consequently the levels of foreign currency reserves. monthly food imports since May 2019. Overall, the total volume of food imported and discharged carrying 485,456 tons of fuel and gas were still detained, with a total detention period of 1,432 The Cash Consortium Yemen attributed rapid depreciation of the rial during June-August to through Hodeidah and Saleef ports during January-July 2020 amounted to 1.94 million metric tons days since UNVIM inspection and clearance. various factors, including clashes between the Southern Transitional Council (STC) and the (including food imported by agencies), 128,664 higher than in the same period in 2019. It is worth In areas under the Sana’a-based authorities, prices of petrol and diesel - which soared during the IRG, excessive printing of new notes by the CBY Aden, limited availability of foreign first half of July - decreased during the month before mid-August by 18 and 10 percent currency in the local market, active engagement of currency brokers in the foreign Fig 2: Prices of petrol* (YER) Petrol prices are twice as high in Sana’a-based authorities areas compared to areas under IRG; wide reliance on respectively. The ease in fuel prices followed the increased supply in the parallel market. exchange market, and, the implications of COVID-19 on markets and livelihoods, the parallel market Prices of petrol and diesel in IRG areas on the other hand increased by 15 and 35 percent 3 near-depletion of the KSA deposit and the sharp decline in remittances. The IRG has 750 respectively during the month before mid-August. Yemen Petroleum Company raised fuel prices received approval to use USD 61.5 million of the remaining balance of the KSA deposit for Petrol-areas under control of Sana'a-based authorities 650 Currency crisis in response to the recent depreciation in the rial and the overall increase in global prices of oil. letters of credit on 9 August which indicates that the KSA deposit is close to full depletion, & ↑ Intl. prices Petrol-IRG Supply shock in areas under Cooking gas remained s parsely available in areas under the control of Sana'a-based authorities, while other key sources of foreign exchange remain depressed. With more than 90 percent 550 control of Sana'a-based and some of the IRG controlled areas, mainly Socotra.10 import dependency for wheat and other food commodities and in the absence of adequate authorities official sources for foreign currencies, importers have to rely increasingly on informal 450 Map1: sources for US dollar that are more expensive than the official and preferential exchange YER/Litre 350 Poor food consumption and cost of the minimum food basket rates. Poor Food Consumption in 250 July 2020 (% of HHs)

Sa'dah 5% Al Maharah 150 Al Jawf Hadramawt 5% - 10% 11% - 15% Amran Jul-19 Jul-18 Jul-20 Jan-20 Jan-19 Jan-18 Jun-20 Jun-19 Jun-18 15% Oct-19 Oct-18 Apr-20 Apr-19 Apr-18 Feb-20 Sep-19 Feb-19 Sep-18 Feb-18 Hajjah Dec-19 Dec-18 Aug-19 Aug-18 Mar-20 Mar-19 Mar-18 Nov-19 Nov-18 May-20 May-19 May-18 Monthly/Weekly Changes Fig 3: Prices of diesel* (YER) Wk1-Aug-20 Wk2-Aug-20 Sana'a City Cost of Minimum Food Ma'rib Sana’a-based authorities: Parallel market prices slightly decreased during August, following the July peak Basket W2-August 2020 AlMahwit M/M W2-Aug 1.3% - 5% Sana'a vs. W2-July AlHodeidah 700 2020 5% Diesel-areas under control Dhamar Shabwah of Sana'a-based authorities W/W W2-Aug 0.29% - 1.25% Raymah Currency crisis Supply shock in areas under vs. W1- Aug 600 Al Bayda & ↑ Intl. prices control of Sana'a-based 2020 1.25% Diesel-IRG a Ibb authorities Increased to the next Ad Dali' 500 Category of Poor Abyan Food Consumption Ta'iz Lahj Socotra _ 400 (% of HHs) - Deterioration in food consumption was observed for assisted and non-assisted households. July vs June 2020

YER/Litre Aden However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 300 percent) compared to those assisted (36 percent). Without humanitarian food assistance, the Poor food consumption (severe deprivation) increased after Ramadan in most of the governorates, affecting more than one fifth of households in Shabwah, Raymah, 200 Lahj, Al Jawf and AlBayda. prevalence of inadequate food consumption amongst assisted households would be very high. In fact, June and July data show a notable increase in the number of WFP-assisted households 100 5 Yemen Monthly Economic Update, World Bank, July 2020. 6 Operational Snapshot July 2020, United Nations Verification and Inspection Mechanism for Yemen, July 2020, https://vimye.org/doc/OSMonthly/Operational_Snapshot_Ju- with inadequate food consumption in areas under the control of Sana'a-based authorities, ly2020.png 7 i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact Jul-19 Jul-18 Ibid. Jul-20 Jan-19 Jan-20 Jan-18 Jun-19 Jun-20 Jun-18 Oct-18 Oct-19 Apr-19 Apr-20 Apr-18 Sep-18 Feb-19 Sep-19 Feb-20 Feb-18 Dec-18 Dec-19 Aug-18 Aug-19 Mar-19 Mar-20 Mar-18 Nov-18 Nov-19 8 May-19 May-20 May-18 Ibid, Yemen Monthly Economic Update, World Bank, June 2020 9 Ibid, Yemen Monthly Economic Update, World Bank, June 2020. following a reduction in the levels of general food assistance provided in areas under the Wk1-Aug-20 Wk2-Aug-20 10 Prices of cooking gas collected at the moment undergo degrees of volatility that cannot be explained and are thus not reported.

Food Prices Fig 6: Average weekly prices of vegetable oil (YER/Litre) Above crisis-level prices of Oct 2018 Monthly inflation in food prices slowed down in IRG areas. However, Socotra and Abyan 800 have seen notable price increases in some of the food commodities during the month leading 760 to mid-August. For example, the price of wheat flour soared to parallel market-like YER 800 per kg 706.3 700 in Socotra compared to an average price of YER 352 per kg in the rest of the governorates under IRG, 687 which is partly to due to the interruption of supply during the monsoon season that has started. 620 600 The cumulative increase in food prices in 2020 is concerning, especially in areas under IRG. Prices of vegetable oil, sugar and red beans increased in those areas since the start of 2020 by 50, 500 45 and 37 percent respectively; furthermore, wheat flour, the key staple food commodity, increased by 23 percent. Marked inflation in the cost of the MFB had already crossed the 2018 400 11 crisis level benchmark by 15 percent, to reach YER 6,318/person/month. In mid-August, the Avg. for IRG ar eas Avg. for areas under control cost of the MFB was highest in Abyan, Socotra and Aden. of Sana'a-based authorities 300 The cost of the MFB is likely to continue increasing in September due to further depreciation in the rial and high fuel prices. Regarding international prices of key food commodities, the overall FAO food price index reached WK1-Jul20 WK4-Jul20 WK1-Jul18 WK4-Jul18 WK1-Jul19 WK4-Jul19 WK2-Jun18 WK2-Jun19 WK2-Jun20 wk2-Dec18 wk2-Dec19 Wk3-Feb18 Wk3-Feb19 Wk3-Feb20 WK1-Oct18 WK4-Oct18 WK1-Oct19 WK4-Oct19 WK1-Apr18 WK4-Apr18 WK1-Apr19 WK4-Apr19 WK1-Apr20 WK4-Apr20 WK1- Jan18 WK4- Jan18 WK1- Jan19WK1- Jan19WK4- WK1- Jan20 WK4- Jan20 WK2-Sep18 WK2-Sep19 WK3-Aug18 WK3-Aug19 WK3-Nov18 WK3-Nov19 WK2-Mar18 WK2-Mar19 WK2-Mar20 WK3-May18 WK3-May19 a 6-month high during August 2020, driven by the 5.9 percent increase in the vegetable oil index, WK3-May20 6.7 percent increase in sugar index, in addition to 1.9 percent increase in prices of cereals. Fig 7: Average weekly prices of sugar (YER/Kg) Fig 4: Average cost of the minimum food basket (YER) Prices up by 29 percent in Yemen since early 2020 The cost of MFB in IRG areas is already 15 percent above 2018 crisis level 500 481 6,000 460 5,700 410 5,400 420 396 5,100 380 4,800

4,500 340

4,200 300 3,900 YER Person / Month / 260 3,600 Avg. for IRG ar eas Avg. for areas under control Avg. for IRG areas Avg. for areas under control 3,300 of Sana'a-based authorities of Sana'a-based authorities 220 3,000 Jul-19 Jul-18 Jul-20 Jan-20 Jan-19 Jan-18 Jun-19 Jun-18 Jun-20 Oct-19 Oct-18 Apr-20 Apr-19 Feb-20 Apr-18 Feb-19 Feb-18 Sep-19 Sep-18 Dec-19 Dec-18 Aug-19 Aug-18 Nov-19 Nov-18 Mar-20 Mar-19 Mar-18 May-20 May-19 May-18 WK2-Jul20 WK2-Jul19 WK2-Jul18 WK2-Jun20 WK2-Jun19 WK2-Jun18 wk2-Dec19 wk2-Dec18 WK2-Oct19 WK2-Oct18 WK2-Apr20 WK2-Apr19 WK2-Apr18 WK2- Jan20 WK2- Jan19WK2- WK2- Jan18 WK2-Feb20 WK2-Feb19 WK2-Feb18 WK2-Sep19 WK2-Sep18 WK2-Aug20 WK2-Aug19 WK2-Aug18 WK2-Nov19 WK2-Nov18 WK2-Mar20 WK2-Mar19 WK2-Mar18 WK2-May20 WK2-May19 WK2-May18 w1-Aug-20 w2- Aug-20w2-

Fig 5: Average weekly prices of wheat flour (YER/Kg) Fig 8: Average weekly prices of red beans (YER/Kg) Prices in IRG areas 30 percent higher than August 2019 Prices in IRG areas are 32 percent above those in Sana'a-based authorities areas mid-August 2020 351 360 1100 335 330 1,115 1000 918 300 900 297 846 270 800 240 700 Deterioration in food consumption was observed for assisted and non-assisted households. 210 However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 Avg. for IRG ar eas Avg. for areas under control 600 Avg. for IRG ar eas Avg. for areas under control percent) compared to those assisted (36 percent). Without humanitarian food assistance, the 180 of Sana'a-based authorities of Sana'a-based authorities 500 prevalence of inadequate food consumption amongst assisted households would be very high. In fact, June and July data show a notable increase in the number of WFP-assisted households with inadequate food consumption in areas under the control of Sana'a-based authorities, WK1-Jul20 WK4-Jul20 WK1-Jul19 WK4-Jul19 WK1-Jul18 WK4-Jul18 WK1-Jul19 WK1-Jul20 WK1-Jul18 i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact WK2-Jun20 WK2-Jun19 WK2-Jun18 wk2-Dec19 wk2-Dec18 WK1-Jun19 WK1-Jun20 WK1-Jun18 wk1-Dec19 wk1-Dec18 Wk3-Feb20 Wk3-Feb19 Wk3-Feb18 WK1-Oct19 WK4-Oct19 WK1-Oct18 WK4-Oct18 WK1-Apr20 WK4-Apr20 WK1-Apr19 WK4-Apr19 WK1-Apr18 WK4-Apr18 WK1- Jan20 WK4- Jan20 WK1- Jan19WK1- Jan19WK4- WK1- Jan18 WK4- Jan18 Wk1-Feb20 Wk1-Feb19 Wk1-Feb18 WK1-Oct19 WK1-Oct18 WK1-Apr19 WK1-Apr20 WK1-Apr18 WK1- Jan20 WK1- Jan19WK1- WK1- Jan18 WK2-Sep19 WK2-Sep18 WK3-Aug19 WK3-Aug18 WK3-Nov19 WK3-Nov18 WK1-Sep19 WK1-Sep18 Wk1-Mar20 Wk1-Mar19 Wk1-Mar18 WK2-Mar20 WK2-Mar19 WK2-Mar18 WK1-Aug19 WK1-Aug20 WK1-Aug18 WK1-Nov19 WK1-Nov18 WK3-May20 WK3-May19 WK3-May18 WK1-May19 WK1-May20 WK1-May18 following a reduction in the levels of general food assistance provided in areas under the 11 See footnote 1

Fig 9: Average weekly prices of rice (YER/Kg) Fig 11: Prevalence of Poor Food Consumption(Assisted HHs* vs. Non-Assisted HHs) IRG: Prices remain close to 2018 peak levels Poor food consumption on the rise, particularly for non-assisted households 1100 20% 45% 1,025 1,008 1000 41% 18% 40% 933 36% 16% 900 35% 14% 30% 800 12% 25% 700 10% Avg. for IRG ar eas Avg. for areas under control 20% of Sana'a-based authorities 8% 600 15% 6% Percent households of Percent Percent households of Percent 8% 8% 9% 7% 8% 9% 11% 10% 13% 14% 11% 14% 16% 10% 4% 10% 5% WK3-Jul20 WK3-Jul18 WK3-Jul19 2% WK1-Jun18 WK4-Jun18 WK1-Jun19 WK4-Jun19 WK1-Jun20 WK4-Jun20 wk1-Dec18 wk4-Dec18 wk1-Dec19 wk4-Dec19 WK3-Oct18 WK3-Oct19 WK3-Apr18 WK3-Apr19 WK3-Apr20 WK3- Jan18 Jan19WK3- WK3- Jan20 WK2-Feb18 WK2-Feb19 WK2-Feb20 WK1-Sep18 WK4-Sep18 WK1-Sep19 WK4-Sep19 Wk1-Mar18 Wk1-Mar19 Wk1-Mar20 WK2-Aug20 WK2-Aug18 WK2-Aug19 WK2-Nov18 WK2-Nov19 WK4-Mar18 WK4-Mar19 WK4-Mar20 WK2-May18 WK2-May19 WK2-May20 Food Security Status, July 2020 (update for the full month of July) 0% 0%

Against the increase in food prices, deterioration in incomes and livelihoods, rising conflict and the Jul 20 Jan-20 Jun-20 Apr-20 Feb -2 0 Mar-20 reduction in humanitarian assistance, more households were unable to fulfil their minimum food May-20 needs during June-July 2020. FEWS NET expects a worsening food security situation in Yemen, Poor FCG Non-assisted HHs Inadequate FCG Non-assisted HHs (secondary axis) driven by the combination of the factors above, further exacerbated by the impact of Poor FCG Assisted HHs Inadequate FCG Assisted HHs (secondary axis) 12 COVID-19. * 93.6 percent of "Assisted HHs" are assisted by WFP. Household food consumption measured by the WFP proxy indicator “Food Consumption 13 Fig 12: Prevalence of Poor Food Consumption (IDPs vs. Non-IDPs) Score-FCS” indicates an increase in the proportion of households with inadequate food One in five non-assisted IDPs likely to have poor food consumption consumption, from 33 percent in February to 39.2 percent in July after Ramadan-related brief seasonal improvement.14 Households with severe deprivation in food consumption, “Poor FCG”, 20% 19% increased from 9 percent in February to 13.9 percent in July. Food consumption has 18% stabilized/slightly improved in August due to the seasonal increase in consumption during Eid 16% Al-Adhha, as well as payment of full month salaries to all civil servants and military and security 14% forces in areas under IRG at the end of July, and payment of half month salaries to all public workers in the north.15 12% 10% 10% Fig 10: Prevalence of Food Consumption Groups (national-level) July 2020: Highest share of households with inadequate food consumption in 2020 8% 6% 100% households of Percent 9% 4% 9% 8% 10% 11% 13% 10% 10% 11% 90% 15% 15% 11% 16% 12% 2% 80% 0% 70% 67% 65% 65% 66% 71% 64% Jul 20 60.8% Jan-20 Jun-20

Poor FCG Apr-20 60% Feb -2 0 Mar-20 May-20

50% Borderline FCG IDPs Non-IDPs Non-assisted IDPs Assisted IDPs 40% Acceptable FCG Deterioration in food consumption was observed for assisted and non-assisted households. 30% However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 Percent households of Percent 25.3% 24% 23% 19% 24% 23% 20% 23% percent) compared to those assisted (36 percent). Without humanitarian food assistance, the prevalence of inadequate food consumption amongst assisted households would be very high. In 10% fact, June and July data show a notable increase in the number of WFP-assisted households 9% 10% 11% 10% 12% 13% 0% 13.9% with inadequate food consumption in areas under the control of Sana'a-based authorities, i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact Jul 20 Jan-20 Jun-20 Apr-20

Feb -2 0 following a reduction in the levels of general food assistance provided in areas under the Mar-20 May-20

Sana'a-based authorities from April as a result of a reduced funding outlook and operational challenges. Assistance is currently provided every two months instead of monthly. Inadequate food consumption also increased in areas under IRG from 30 percent in May to 39 percent in July, apparently for different reasons compared to areas under the Sana’a-based authorities, mostly related to escalation in conflict, further depreciation of the Yemeni rial and the unprecedented increase in the cost of MFB to an all-time high during July. The 2020 Integrated Food Security Phase Classification (IPC) analysis for the south16 projects that between July and December 2020 3.2 million people are estimated to be highly food insecure in the south alone (IPC Phase 3 and above). Deterioration in food consumption was observed for assisted and non-assisted households. However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 percent) compared to those assisted (36 percent). Without humanitarian food assistance, the prevalence of inadequate food consumption amongst assisted households would be very high. In fact, June and July data show a notable increase in the number of WFP-assisted households with inadequate food consumption in areas under the control of Sana'a-based authorities, i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact following a reduction in the levels of general food assistance provided in areas under the

Food Security and Price Monitoring 5

Sana'a-based authorities from April as a result of a reduced funding outlook and operational Fig 15: Dietary Diversity for Poor, Borderline and Acceptable FCGs, July 2020 challenges. Assistance is currently provided every two months instead of monthly. Close to 65% of households in poor FCG consume 4 or less food groups Close to 66% of households in acceptable FCG consume 7 or > food groups Inadequate food consumption also increased in areas under IRG from 30 percent in May to 39 percent in July, apparently for different reasons compared to areas under the Sana’a-based 45% authorities, mostly related to escalation in conflict, further depreciation of the Yemeni rial and the unprecedented increase in the cost of MFB to an all-time high during July. The 2020 Integrated 40% Food Security Phase Classification (IPC) analysis for the south16 projects that between July and December 2020 3.2 million people are estimated to be highly food insecure in the south alone (IPC 35% Phase 3 and above). 30%

Fig 13: Food consumption groups amongst WFP beneﬁciaries 25% July 2020: Impact of reduced assistance is still felt in areas under Sana'a-based authorities, in addition to higher prevalence of inadequate food consumption in areas under IRG 20%

15% Percent Households of Percent 10%

62% 61% 72% 70% 57% 64% 57% 61% 5% Poor FCG Borderline FCG Acceptable FCG Acceptable 0% Borderline 1 2 3 4 5 6 7 8 29% 26% Poor 25% 24% 19% 21% 30% 23% Average number of food groups consumed by households / week

13% 15% 13% 13% 14% 14% 9% 9% Fig 16: Dietary Diversity of HHs with Poor Food Consumption, by Assistance during July 2020 Areas under control Areas under control Areas under control Areas under control Similar dietary diversity of HHs in poor FCG, regardless of assistance of Sana'a-based IRG of Sana'a-based IRG of Sana'a-based IRG of Sana'a-based IRG authorities authorities authorities authorities 40% Feb/Mar 20 Apr/May 20 Jun 20 Jul 20 34% 35% 31%

As conﬂict remains a key driver of poor access to food, June and July data highlight the increase of 29% inadequate food consumption in governorates with a high intensity of conﬂict (Abyan, Al-Jawf and 30% 25% 23% Ma’rib); from 33 percent in May to 46 percent in July. 25% 22% The prevalence of (very) low dietary diversity amongst households with poor food consumption also 20% worsened from 26 percent in May to 31 percent in July. This group consumes three or less food groups throughout the week and mainly relies on cereals, fats and sugar, rather than other macro 15% 14% Percent households of Percent and micro-nutrient rich foods. 10% 8% 6%

Fig 14: Average Weekly Frequency of Food Groups Consumped per Household, July 2020 5% 3% 2%

Nearly 4.2 million people in Yemen have a poor diet and consume pulses, fruits, proteins or dairy less than 1% once a week 0% 1 2 3 4 5 6 7 8 HH with Acceptable FC Average number of food groups consumed by households / week

6.7 6.6 6.5 3.6 4.5 3.8 2.1 1.4 Non-Assisted HHs Assisted HHs

HH with Borderline FC 58 percent of households with poor food consumption are highly vulnerable to livelihood shocks; and about 48 percent amongst these households rely on assistance and borrowings to meet their food 6.4 6.2 6.0 1.8 2.7 1.0 0.7 0.6 needs. Household responses indicate that unemployment, reduced wages, high health expenses and HH with Poor FC increasing food prices constrain their access to food, all explaining the heightened risk of an escalating humanitarian crisis during 2020 along with the rapidly developing economic crisis and the 6.0 5.2 5.2 1.0 0.6 03 reduced assistance (see ﬁgure 17).

12 IIbid, COVID-19 exacerbates already deteriorating food security situation in world’s largest humanitarian crisis, FEWS NET, 7 August 2020. (Number of days of consumption / week) 13 The status of household access to food is measured using the Food Consumption Score as a simple proxy indicator, where the population with low frequency/quality of food consumption is referred to as “poor” food consumption group (FCG), those borderline consumption as “borderline” FCG and the rest “acceptable” FCG. Cereals Fats Sugar Vegetables Pulses 14 Data from mVAM, covering 1-23 June 2020. Dairy Proteins Fruits 15 Yemen Monthly Economic Update, World Bank, July 2020 16 IPC was conducted for 133 districts in 13 governorates in 2020 and the results were released on 22 July 2020. Deterioration in food consumption was observed for assisted and non-assisted households. However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 percent) compared to those assisted (36 percent). Without humanitarian food assistance, the prevalence of inadequate food consumption amongst assisted households would be very high. In fact, June and July data show a notable increase in the number of WFP-assisted households with inadequate food consumption in areas under the control of Sana'a-based authorities, i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact following a reduction in the levels of general food assistance provided in areas under the

Food Security and Price Monitoring 6

Sana'a-based authorities from April as a result of a reduced funding outlook and operational Fig 17: Key Shocks Affecting HH with Poor Access to Food, July 2020 Fig 19: Percent of HHs Adopting Food Consumption-based Coping Strategies, July 2020 challenges. Assistance is currently provided every two months instead of monthly. Unemployment & lower wages are key shocks for food access, while high food prices increasingly important Food-based coping strategies more prominent in northern governorates than in southern ones Inadequate food consumption also increased in areas under IRG from 30 percent in May to 39 percent in July, apparently for different reasons compared to areas under the Sana’a-based 1% 1% 96% authorities, mostly related to escalation in conflict, further depreciation of the Yemeni rial and the 4% 100% 96% 92% 92%

8% 91% unprecedented increase in the cost of MFB to an all-time high during July. The 2020 Integrated 95% 91% 90% 90% 90% 90% 90% Food Security Phase Classiﬁcation (IPC) analysis for the south16 projects that between July and Unemployment or reduced wages 89% 90% December 2020 3.2 million people are estimated to be highly food insecure in the south alone (IPC 85% 85% 85%

High food price 83% 82% 82% Phase 3 and above). 85% 81% Other 11% 76% 80% 76% High health expenditure 75% High debt 58% 70%

Violence/Conﬂict Households of Percent 65% Rent 17% 60% t ' h r t y h a j h i f h a i n h h n z t b n l ' b w a i a a i a h h a ' a a a a e a w a r a w r b d j C i r a ' d j a y I i

m w d i a d a h n ' D m L J a T

e a m b a a

b a m a h y A a a ' l a d d h a A H B S M a S a a A A r

M o A h l D R

n d l M S H A

a a l

A l S A H A

Fig 18: Main Source of Food for HHs with Poor Food Consumption, July 2020 COVID-19 remains a compounding factor exacerbating the points mentioned above. The High dependence on markets, yet social networks/support and food assistance are still basic lifeline for implications of COVID-19 on household access to markets and key services were visible during households with poor food consumption July; 46 percent of households reported increasing challenges to access medical care; also, 31 percent reported challenges in accessing markets; and nearly 27 percent of households had members who received reduced salaries or none at all during July. As reported by FEWS NET, the 1% impacts of COVID-19 are expected to continue deteriorating food security levels through the remainder of 2020, which are driven by reductions in civil servant salary payments, reduced 22% remittances, and declining demand for wage labour and rising food prices. 51% Finally, and in addition to the above, heavy rains/floods have continued to cause widespread Own Cash destruction across Yemen during July and August, adding to the already deteriorated humanitarian situation in 2020. The impact extended to many governorates across Yemen, Borrowed/Gift mostly in Sana’a, Ma’rib, Hajjah, Raymah, Al Mahwit and Al Hodeidah. The rains affected Food Assistance infrastructure, roads, shelters, homes, livelihoods, and caused casualties and deaths in some Other areas. OCHA reported that an estimate of over 62,000 families were affected in the governorates listed above; the estimate was derived from various sources including authorities and partners.17

26%

Notes: i) WFP monitors collect weekly market prices and USD/YER currency exchange rates across 22 governorates in 23 markets (2 in Hadramawt). ii) The calculation for the cost of the Minimum Food Basket (per person per month) mimics the WFP in-kind food basket; it contains 10.7kg of wheat ﬂour, 360g of sugar, 1.06kg of vegetable oil, 1.43 kg of red beans, 140g of Salt. iii) For alerting on price changes, we use prorated thresholds for annual changes of 15 percent. iv) Through monthly, remote phone calls to around 4,300 households across 21 governorates, WFP monitors the food security situation on a monthly base. v) “Assisted HHs” are households receiving assistance from WFP or elsewhere, in April 2020, 93.6 percent of “Assisted HHs” were WFP beneﬁciaries and only 1.8 percent were receiving from other sources, the rest did not know the source of assistance. vi) Food based coping strategies refer to WFP’s Reduced Coping Strategy Index (rCSI), which captures a reduced list of coping mechanisms that households could be adopting to make access food; including consumption of less preferred foods, reducing number of meals or portions of food, borrowing money or food, or adults eating 17 OCHA Yemen Situation Report, 3 September 2020. less for children to eat. 17 OCHA Yemen Situation Report, 3 September 2020. Deterioration in food consumption was observed for assisted and non-assisted households. However, inadequate food consumption is more prevalent amongst non-assisted HHs (41 percent) compared to those assisted (36 percent). Without humanitarian food assistance, the prevalence of inadequate food consumption amongst assisted households would be very high. In fact, June and July data show a notable increase in the number of WFP-assisted households with inadequate food consumption in areas under the control of Sana'a-based authorities, i.e., from 28 percent in May to 43 percent in June and July. This is an indication of the impact following a reduction in the levels of general food assistance provided in areas under the

Food Security and Price Monitoring 7

Sa'dah Sa'dah 30% 6% Al Jawf Al Jawf 24% 8% Hadramawt Al Maharah Hadramawt Al Maharah 30% Amran 23% 26% 8% 11% 19% Hajjah Hajjah Amran 17% 6%

Sana’a City Sana’a City Al Mahwit Ma'rib Al Mahwit Ma'rib 30% 17% 14% 13% Sana'a 30% Sana'a 15% Al Hodeidah Al Hodeidah 21% 24% 8% 22% Dhamar Shabwah 11% Dhamar 12% Shabwah Raymah 26% Raymah 11% Al Bayda Al Bayda Socotra Socotra Ibb 22% Ibb 9% 36% Ad Dali' 14% Ad Dali' 19% 13% Abyan 31% Abyan 23% Ta'iz Ta'iz 34% Lahj 24% Lahj 29% 17% - 20% 20% 6% - 9% (6) 23% 21% - 24% 18% 10% - 13% (6) Aden % HHs with incomes aﬀected by Aden % HHs unable to reach their jobs 25% - 28% COVID-19 (unpaid/paidless) since start of pandemic 14% - 17% (4) 29% - 32% 18% - 20% (3) 33% - 36% 21% - 24% (2)

Map 3: Households facing challenges in accessing markets - July 2020 Map 5: Households facing challenges accessing medical care - July 2020

Sana’a City 46%

Sana’a City 29%

Sa'dah Sa'dah 28% 47% Al Jawf Al Jawf 36% 41% Hadramawt Al Maharah Hadramawt Al Maharah 45% 30% 30% 26% 28% Amran 26% Hajjah Amran Hajjah 37% 53%

Sana’a City Sana’a City Al Mahwit Ma'rib Al Mahwit Ma'rib 31% 28% 56% 42% Sana'a 37% Sana'a 47% Al Hodeidah Al Hodeidah 32% 43% 37% Shabwah 33% Dhamar 27% Shabwah 51% Dhamar Raymah 40% Raymah 49% Al Bayda Al Bayda Socotra Socotra Ibb 32% Ibb 51% 30% Ad Dali' 45% Ad Dali' 28% 43% Abyan 27% Abyan 41% Ta'iz 20% - 24% (1) Ta'iz 30% Lahj 63% Lahj 26% - 33% (2) 25% 25% - 28% (8) 39% % HHs facing challenges in 34% - 41% (4) 20% 29% - 32% (7) 37% Aden accessing markets Aden 42% - 48% (7) 33% - 36% (2) % HHs facing challenges in accessing medical care 49% - 56% (5) 37% - 40% (3) 57% - 63% (1)