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Market Assessment in Darfur

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Market Assessment in Darfur Market Assessment Darfur IMAGE TO REPRESENT COUNTRY April 2014 Data collected in December 2013 1 | P a g e MARKET ASSESSMENT IN DARFUR Published in April 2014 Data collected in December 2013 For additional information, please contact: WFP Sudan Eric Kenefick, Head of Programme [email protected] WFP Headquarters Issa Sanogo, Head of Economic and Market Analysis Unit [email protected] Oscar Maria Caccavale, Market Analyst [email protected] All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial uses are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission. Applications for such permission should be addressed to the Director, Communications Division, e-mail: [email protected]. © WFP 2014 United Nations World Food Programme Via C.G. Viola, 68 - 00148, Rome, Italy i | P a g e Market Assessment in Darfur |April 2014 Contents LIST OF FIGURES ............................................................................................. IV LIST OF TABLES ................................................................................................. V LIST OF ANNEXES ............................................................................................... V EXECUTIVE SUMMARY ...................................................................................... VI ACKNOWLEDGEMENTS ..................................................................................... XI ABBREVIATIONS AND ACRONYMS .................................................................... XI 1. OBJECTIVE OF THE STUDY .............................................................................. 1 2. METHODOLOGY .............................................................................................. 2 3. BACKGROUND ................................................................................................ 3 3.1 DISPLACEMENT IN DARFUR .................................................................................. 4 3.2 DRIVERS OF FOOD INSECURITY .............................................................................. 5 4. ECONOMIC PERFORMANCE ............................................................................. 7 4.1 MACROECONOMIC SITUATION ............................................................................... 7 4.2 TRADE .......................................................................................................... 9 5. FOOD AVAILABILITY .................................................................................... 11 5.1 AGRICULTURE IN SUDAN ................................................................................... 11 5.2 CEREAL PRODUCTION ....................................................................................... 12 5.3 FOOD GRAIN BALANCE ...................................................................................... 14 5.4 STRATEGIC RESERVES ...................................................................................... 16 6. DEMAND-SIDE: A FOOD SECURITY BACKGROUND ........................................ 18 6.1 OBJECTIVE ................................................................................................... 18 6.2 METHODOLOGY: A MULTILEVEL APPROACH ............................................................... 18 6.4 THE MODEL ................................................................................................... 20 6.5 EMPIRICAL RESULTS AND DISCUSSION ................................................................... 22 7. MARKET STRUCTURE AND CONDUCT – A TRADERS SURVEY PERSPECTIVE ... 27 7.1 TRADERS PROFILING ........................................................................................ 28 7.2 VOLUMES AND FLOWS ...................................................................................... 29 7.2.1 Catchment areas .................................................................................. 32 7.3 CONSTRAINTS AND RESPONSE CAPACITY ................................................................. 36 7.4 CREDIT AND STOCKS........................................................................................ 40 7.5 ASSESSING ASSERTED TRADERS’ CAPACITY TO RESPOND .............................................. 42 7.5.1 Market capacity to respond: dashboards .................................................. 46 8. MARKET PERFORMANCE - PRICE ANALYSIS ................................................. 49 8.1 FORECAST AND WARNINGS ................................................................................. 51 9. IMPACT OF FOOD ASSISTANCE PROGRAMS ON LOCAL PRICES ..................... 53 9.1 OVERVIEW OF WFP OPERATIONS IN FASHER ............................................................ 53 9.2 IMPACT ESTIMATION MODEL ............................................................................... 55 9.2.1 Theoretical background ......................................................................... 55 ii | P a g e Market Assessment in Darfur |April 2014 9.2.2 Explaining the model ............................................................................. 56 9.2.3 Empirical results and discussion .............................................................. 58 9.3 IMPACT EVALUATION FROM A TRADER PERSPECTIVE .................................................... 62 9.3.1 Non participant traders .......................................................................... 63 9.3.2 Participant traders ................................................................................ 66 10. CONCLUDING REMARKS AND RECOMMENDATIONS .................................... 67 REFERENCES .................................................................................................... 71 ANNEXES .......................................................................................................... 73 ANNEX TO SECTION 6 ........................................................................................... 73 ANNEX TO SECTION 7 ........................................................................................... 77 ANNEX TO SECTION 8 ........................................................................................... 77 TRADERS’ SURVEY ................................................................................................ 79 MARKET QUESTIONNAIRE ....................................................................................... 96 iii | P a g e Market Assessment in Darfur |April 2014 List of Figures Figure 1 - Nutritional Status of under 5-year Children (Malnutrition) in percentage, 2010 ............ 6 Figure 2 - Malnutrition in selected localities (%) ...................................................................... 7 Figure 3 - Real GDP and population growth rates .................................................................... 7 Figure 4 - Inflation .............................................................................................................. 8 Figure 5 - Agriculture and Oil Sector Shares on GDP (%) ......................................................... 8 Figure 6 - Trade Balance .................................................................................................... 10 Figure 7 - Sorghum and millet domestic production by sector ................................................. 13 Figure 8 - Self-sufficiency of food grains by state (2011/2012) ............................................... 15 Figure 9 - Food Aid in Sudan 1988-2012 (Metric Tons) .......................................................... 16 Figure 10 - Estimating Group Effects ................................................................................... 20 Figure 11 - Unexplained Variance as a function of time changes ............................................. 25 Figure 12 - Ranking of predicted FCS by location .................................................................. 26 Figure 13 - Commodities traded .......................................................................................... 29 Figure 14 - Most important commodity out of all the commodities traded ................................. 29 Figure 15 - Extent of sales change from last year (same period) ............................................. 30 Figure 16 - Reason for sales change from last year (same period) ........................................... 30 Figure 17 - Main sources of supply ...................................................................................... 31 Figure 18 - Trading connections in case of poor supply .......................................................... 32 Figure 19 - Millet Wholesale Prices (SDG/KG) ....................................................................... 36 Figure 20 - Constraints preventing business expansion .......................................................... 37 Figure 21 - Estimation of check-point, losses and transportation on total costs (cumulative share by number of traders) ........................................................................................ 37 Figure 22 - Risk mitigation related to insecurity .................................................................... 38 Figure 23 - Fuel price transmission on food commodities........................................................ 39 Figure 24 - Expected price behaviour with a 25% increase
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