Borno and Yobe States Market Monitoring Report April 2017-ISSUE 4

BULLETIN October 2016 ISSUE 1

FightingHunger Worldwide NIGERIA Borno and Yobe States Market Monitoring Report April 2017-ISSUE 4

Highlights

 The Survival Minimum Expenditure Basket (calculated for 2,100 kcal/per person) for a family of 5 people increased by 9.1 percent from 24,814 Naira in March 2017 to 27,101 Naira in April 2017 in Borno State. In Yobe State, the SMEB increased by 1.2 percent over the same period.

 The rising cost of the food basket in Borno State is driven by sustained increases in the prices of cowpea, peanuts, and sorghum by 24.3 percent, 30.8 percent and 37.5 percent respectively between November 2016 and April 2017. In Yobe State, the rising trend in the cost of the food basket is the result increases in the prices of local rice (21.4 percent), beans (42.4 percent), peanuts (18 percent) and palm oil (31.7 percent) between December 2016 and April 2017.

 The increasing prices of staple food commodities and cost of the food basket along with the low purchasing power of households could further hamper food access for displaced and poor households in the two states.

Introduction Despite an increase in agricultural production in several parts the country in 2016/17, the northeastern states of Borno and Yobe recorded a substantial decrease in the output of maize, sorghum and millet as compared to the five-year and remain significantly dependent on others parts of the country to meet their food needs at high prices. The prices of local staple food items have continued to trend upward in response to seasonal decline in household level food availability and decreasing market supply. The current economic downturn in the country, coupled with the devaluation of the naira and rising inflation triggered increasing trends in the cost of food and non-food items which significantly reduced the purchasing power of poor market-dependent households and internally displaced populations. These conditions have continued to reduce the ability of various population groups to access sufficient food to feed their families. WFP Nigeria is implementing a bi-weekly market monitoring system in 11 markets in Yobe State and in 10 main markets within Maiduguri and Jere Local Government Areas (LGAs) of Borno to highlight the impact of market trends on households’ access to food. In Borno State, the monitored markets include Monday market, Abbaganaram, Budum, Kasuwan Shanu, Bullunkutu, Baga Road, Tashan Bama, Custom market, Yan Doya and Bolori Stores (Figure 1). In Yobe State on the other hand, Damaturu, Bursari, Fune, Potiskum, Jakusko, Geidam, Yunusari, Yusufari, Bade, Nguru, Nangere markets are monitored.

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Figure 1 Market price monitoring locations in Borno and Yobe States

Maiduguri (Borno) market locations Yobe market locations

Food basket monitoring The Survival Minimum Expenditure Basket (SMEB) calculates the cost of the minimum quantity of food required to meet 2,100 KCAL a day. The calculation of the SMEB is based on the prevailing prices of sorghum, local rice, cowpea/red beans, palm oil, onions and peanuts. Tables 1 and 2 presents the SMEB for Borno and Yobe States respectively. The SMEB for Borno State increased by 9.1 percent to its highest level of 27,101 Naira in April 2017, from 24,814 Naira in March 2017.

Food Basket Expenditure based on 2,100 Kcal per person per day calculation (Borno State) Daily Monthly Price per Daily Item Ration Cost per Ration Cost per Food individual Daily kilocalories individual Unit of unit in Cost in person per person per month commodity ration per individual ration measurement Naira Naira month in NGN in USD (grams/day) (grams/month)

Sorghum 248 844 7440 Mudu (1.25 Kgs) 275 54.6 1636.8 5.2 Rice 166 598 4980 Mudu (1.25 Kgs) 450 59.8 1792.8 5.7 Cow peas 81 275 2430 Mudu (1.25 Kgs) 435 28.2 845.6 2.7 Palm oil 25 221 750 1 Litre (1 kg) 714 17.9 535.5 1.7 Onion 52 21 1560 4 piece (440 grams) 100 11.8 354.5 1.1 Peanuts 25 142 750 Mudu (1.25 Kgs) 425 8.5 255.0 0.8 Total food expenditure 2,100 181 5,420 17 per person Total MEB per Household 27,101 86

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In Yobe State, the cost of the SMEB increased by 1.2 percent between March and April 2017. December to April increase in the cost of the food basket is 23 percent.

Table 2 Food Basket Expenditure based on 2,100 Kcal per person per day calculation (Yobe State) Daily Monthly Price per Daily Item Ration Cost per Ration Cost per Food individual Daily kilocalories Unit of individual ration unit in Cost in person per person per month commodity ration per individual measurement (grams/month) Naira Naira month in NGN in USD (grams/day)

Sorghum 248 844 7440 Mudu (1.25 Kgs) 200 39.7 1190.4 3.8 Rice 166 598 4980 Mudu (1.25 Kgs) 425 56.4 1693.2 5.4 Cow peas 81 275 2430 Mudu (1.25 Kgs) 400 25.9 777.6 2.5 Palm oil 25 221 750 1 Litre (1 kg) 700 17.5 525.0 1.7 Onion 52 21 1560 4 piece (440 grams) 80 9.5 283.6 0.9 Peanuts 25 142 750 Mudu (1.25 Kgs) 375 7.5 225.0 0.7 Total food expenditure 2,100 156 4,695 15 per person Total MEB per household 23,474 74

The current cost of the SMEB in Borno State is 15 percent higher than the transfer value for the cash transfer program (Figure 2). Since November 2016 (when the local harvest of staple food items occurred), the food basket cost has increased by 4.8 to 9 percent except for March when it decreased by -3.4 percent. The increasing cost of the food basket since November 2016 is driven by increases in the prices of cowpea, peanuts, and sorghum by 24.3 percent, 30.8 percent and 37.5 percent respectively.

In Yobe State on the other hand, the current cost of the SMEB is 0.3 percent lower than the transfer value. Market monitoring of food

commodities commenced in December 2016 and since then, the cost of the food basket has been on the rise. The increasing price trend is the result of increasing prices of local rice (21.4 percent), beans (42.4 percent), peanuts (18 percent) and palm oil (31.7 percent).

Currency depreciation Measures instituted by the Central Bank of Nigeria has helped to stem the rate of depreciation in the value of the Naira against major foreign currencies. Since February 2017, the CBN has injected several millions of dollars into the forex market to reduce the gap between the interbank foreign ex- change market and parallel markets. In February, the CBN also pegged the Naira at the rate of 375 to a dollar for the payment of school fees and personal travel allowanc- es abroad. As a result, the Naira appreciat- ed by 13.2 percent at the parallel market between February and March 2017 (Figure 4). Source: Central Bank of Nigeria Borno and Yobe States Monthly Market Monitoring Report April 2017 - ISSUE 4 3

Trends in prices of food commodities in markets of Borno and Yobe States While maize price in most monitored markets in Borno States have started to increase, they remain below their level for the months of September and October for Baga Road and Monday market. The price of rice in most markets is generally stable. In Yusufari market (Yobe), maize price has been on a rising trend from month to month since December while prices in Geidam are fairly stable. In Potiskum, Damaturu and Geidam (Yobe State) on the other hand, the price of rice showed a noticeable increase in April compared to the previous month.

Maize price trend (1.25 KG) for selected markets in Borno Local rice price trend (1.25 KG) for selected markets in Borno 450 500 400 450 350 400 300 350 300 250 250 200 200 150 150 100 100 50 50 0 0 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17

Abba Gamaram Baga Road Custom Monday Abba Gamaram Baga Road Custom Monday

Maize price (1.25KG) price trend for selected markets in Yobe Rice price (1.25 KG) trend for selected markets in Yobe State 250 500 450 200 400 350 150 300 250 100 200 150 50 100 50 0 0 Yusufari Geidam Damaturu Potiskum Yusufari Geidam Damaturu Potiskum Apr-17 Mar-17 Feb-17 Jan-17 Dec-16 Apr-17 Mar-17 Feb-17 Jan-17 Dec-16

As compared December, the median prices of peanuts, maize, onion, local and imported rice have all increased while prices of palm oil and vegetable oil decreased between December 2016 and April 2017 in Borno State. Similarly, the median prices of red beans, palm oil, vegetable oil and onion have all increased significantly in markets of Yobe State.

Summary of the median retail prices of key food commodities (in Naira) for markets in Maiduguri (Borno State) for April 2017 Maize flour Red beans Current median price 308 Current median price 435 Min 220 Max 365 Min 425 Max 450 % change from Dec. 37% % change from Dec. 24%

Peanuts Imported rice Current median price 425 Current median price 625 Min 400 Max 450 Min 600 Max 635 % change from Dec. 21% % change from Dec. 6%

Palm oil Local rice Current median price 500 Current median price 450 Min 400 Max 625 Min 400 Max 483 % change from Dec. -7% % change from Dec. 8%

Onion Vegetable oil Current median price 100 Current median price 425 Min 100 Max 100 Min 400 Max 625 % change from Dec. 48% % change from Dec. -5%

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Conclusion The prices of staple food commodities are continuing to increase across the monitored markets of Borno and Yobe States. The increasing price trend results from a confluence of factors: a downturn in economic activities in the country characterized by a devalued currency and rising inflation; and seasonal decline in food availability at the household level along with decreasing market supply. The general decline in agricultural production associated with the conflict in Borno and Yobe States implies that market supply of staples in the two states will continue to be hampered and contribute to high prices of these food items during the lean season.

The current cost of the Survival Minimum Expenditure Basket for Borno State (27,101 Naira), which covers 100 percent of beneficiary food needs is 15 percent higher than the transfer value of 23,550 Naira paid to beneficiaries of Cash-Based Transfer programs (CBT). However, as noted in the recent Household Economy Approach Urban baseline report1 by Save the Children, very poor and poor IDP households are able to cover some portion of their food needs. On the strength of these findings, WFP is considering an adjustment in the transfer value to cover only a certain portion of beneficiary households’ food needs. This will be done under the harmonization committee of the Food Security Sector Working Group.