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Haiti Supply and Market Outlook Report

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Haiti Supply and Market Outlook Report HAITI September 27, 2019 Supply and Market Outlook KEY MESSAGES • Total projected cereal production (maize, rice and Figure 1. Aggregate cereal production (maize, rice, sorghum) in sorghum) for 2019/2020 is expected to decrease by Haiti (MT) almost 12.3 percent compared to 2018/2019 but will exceed the five-year average by about 8 percent (Figure 1). Observed losses for 2019/2020 are significantly lower than those recorded between 2014/2015 and 2017/2018. Maize and rice will experience the most significant reduction in production levels. Overall decline in cereal production is due to the negative impact of a poor spring season harvest on subsequent summer and fall growing seasons. • Total cereal supply (production + net imports), i.e. 1,400,000 metric tons (MT), is expected to decrease year on year due to the combined negative effect of Source: FEWS NET estimates based on data from the Ministry of Agriculture, reduced local cereal production and increased cereal Natural Resources and Rural Development (MARNDR) and the United States imports (excluding maize), as the effect of reduced Department of Agriculture (USDA), (2019). production on supply is greater than the effect of increased cereal imports on supply. However, cereal supply is expected to be almost 4 percent above the five-year average. Imported cereals, particularly rice and wheat, will continue to dominate in the national cereal market. • A cereal production deficit of more than 42,000 MT will be observed during the 2019/2020 marketing year, although, compared to the five-year average, a surplus of more than 73,000 MT is expected. The Gonaïves (Artibonite) market will maintain its surplus producing status for the three commodities, even with the expected decline in overall cereal production. Other regions will have to rely on imports, particularly for rice, to cover cereal deficit. • Cereal prices are expected to maintain their upward trajectory throughout the outlook period. They will also remain atypically high compared to the five-year average due to exchange rate depreciation, the decline in production and the possible withdrawal of fuel subsidies. Furthermore, civil insecurity, fueled by socio-political instability, will increase the risk of riots, which could jeopardize market functioning for staple foods throughout the country, particularly in the metropolitan Port-au-Prince area. ABOUT THIS REPORT The Famine Early Warning Systems Network (FEWS NET) monitors trends in staple food supply and price trends in countries at risk of food insecurity. The Supply and Market Outlook report provides a summary of staple food availability, surpluses and deficits during the current marketing year, projected price behavior, implications for local and regional commodity procurement, and essential market monitoring indicators. FEWS NET gratefully acknowledges partner organizations, national ministries of agriculture, national market information systems, regional organizations, and others for their assistance in providing the harvest estimates, commodity balance sheets, as well as trade and price data used in this report. For more information on typical market conditions for staple foods in Haiti, readers are invited to consult the following report: Haiti Staple Food Market Fundamentals. FEWS NET Haiti FEWS NET is a USAID-funded activity. The content of this report does not [email protected] necessarily reflect the view of the United States Agency for International www.fews.net/haiti Development or the United States Government. HAITI Supply and Market Outlook September 2019 CURRENT SITUATION Cereal production 2019/20201 • There was a late start to the 2019 spring growing Figure 2. Rainfall and normalized difference vegetation index season, owing to the irregular distribution of rainfall, (NDVI) January – September 2019, compared to average except for some humid and irrigated areas, particularly in the Sud and Nippes departments, and in other areas where march rainfall was above average (Figure 2). The poor performance of the spring growing season, which accounts for about 60 percent of annual agricultural production, had an adverse effect on the start and therefore performance of the summer growing season. Having consumed the few products harvested during the spring harvest, farmers do not have enough resources to buy seeds for the summer growing season and this is expected to have a negative impact on aggregate cereal self- sufficiency levels (Figure 3). • Source: World Food Programme Vulnerability Analysis and Mapping (WFP - 2019/2020 cereal production is expected to fall by VAM)/Climate Hazards Group InfraRed Precipitation with Station data (CHIRPS)/ 12.3 percent on average from their 2018/2019 levels Moderate Resolution Imaging Spectroradiometer (MODIS), September 2019. (Figure 1). Maize and rice production will fall by Figure 3. Aggregate self-sufficiency levels for local maize, sorghum roughly 15 percent and 14 percent, respectively, while and rice (%) a slight decrease is expected for sorghum production. This trend can be attributed to the negative impact of the poor performance of spring season harvest on the summer and winter growing seasons. Maize production • Although grown in the country’s ten departments, maize is concentrated mainly in the Artibonite, Centre and Ouest departments, which typically produce more than 20,000 MT per year (Figure 5). These three departments alone contributed about 60 percent of total annual production. Compared to 2018/2019 production, 2019/2020 production is expected to fall Source: FEWS NET estimates, August 2019. by an estimated 15 percent. However, it will remain above the five-year average, as losses observed this year are significantly lower than those recorded from 2014/2015 to 2017/2018. • At the same time, the evolution of maize imports from 2011 to 2018 took the form of an inverted U-shape. Beginning in 2011, imports experienced an upward trend, peaking in 2015 before declining in 2018. Imports almost tripled last year from 14,207 MT to 40,000 MT. However, forecasts for 2019/2020 indicated a 50 percent decrease compared to 2018/2019. Rice production • Rice, the second most cultivated cereal in Haiti after maize, is mainly produced in the Artibonite department, which alone covers more than 80 percent of the area planted with rice (Figure 6). According to the same estimates, rice production for 2019/2020 could fall by about 14 percent compared to 2018/2019. This results from a significant decrease in production in the Artibonite region, due to insecurity in the area and decline in government investments 1 Various sources of information were consulted to estimate 2018/2019 and 2019/2020 cereal production levels. Estimates were based on data from the United States Department of Agriculture (USDA), the United Nation’s Food and Agriculture Organization (FAO) and the Ministry of Agriculture, Natural Resources and Rural Development. Sub-national production estimates were calculated based on the spatial population distribution and total agricultural production. Final production estimates also relied on data from previous years given Haiti’s official 2018/2019 and 2019/2020 production estimates were not yet available. Prices are from FEWS NET’s staple food price monitoring across the ten regional markets, and in partnership with Haiti’s National Food Security Coordination Agency (CNSA). Famine Early Warning Systems Network 2 HAITI Supply and Market Outlook September 2019 under its “Caravan for Change” program. Nonetheless, Artibonite supplied nearly 90 percent of total local rice production this year. For all other areas, 2019/2010 local rice production is expected to exceed the five-year average by 19 percent. The 2018/2019 local rice production levels were 62 percent above the five-year average. • Rice imports could increase in 2019/2020 compared to 2018/2019. This is primarily due to the decline in domestic rice production, although the country is typically structurally deficit in rice production. Imports will increase in response to higher cereal requirements of almost 7 percent compared to 2018/2019 and even more compared to the five-year average (about 9 percent). Sorghum production • In 2019, sorghum was grown over a total area of 105,000 ha (utilized agricultural area – UAA). Over 75 percent of production is concentrated in the departments of Ouest (42 percent) and Artibonite (33 percent) (Figure 7). The 2019/2020 sorghum production forecast suggests a decrease that is less significant than that of maize and rice. This decline is mainly because production had already been struggling to recover in recent years due to plant pathologies. In line with this trend, it is expected to fall by 6.5 percent compared to the five-year average. • Sorghum was the only commodity whose production fell relative to the five-year average and that has not been imported in significant quantities for staple food consumption. However, demand for Sorghum remains strong from its use in the production of Malta and the national beer. Market and price trends • The current macroeconomic situation is characterized, Figure 4. Evolution of annual inflation rates and the Haitian on one hand, by the inability of the Haitian gourde (HTG) – U.S. dollar (USD) exchange rates (%) government to finance its expenditures and, on the other hand, by persistent inflationary pressures linked to the depreciation of the gourde. The government’s weak budgetary capacity makes it difficult to finance investment programs. No Finance Act has been passed, a situation exacerbated by access to funding from international agencies (such as the World Bank and the International Monetary Fund) being placed on hold pending the confirmation of a new Head of Government by the Haitian Parliament. • The latest inflation estimates by the Central Bank of Haiti (BRH), indicate inflation levels of 19 percent per annum. The Haitian gourde continues to lose its value Source: FEWS NET estimates using data from OANDA and the Haitian Institute against the U.S. dollar (Figure 4). The relative change of Statistics and Information Technology (IHSI), August 2019. in the inflation rates and the depreciation of the Haitian gourde against the U.S.
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