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Syria Market Assessment Part 1: Lattakia, Tartous & Homs

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Syria Market Assessment Part 1: Lattakia, Tartous & Homs Syria Market Assessment Part 1: Lattakia, Tartous & Homs June 2018 Contents Section 1: Introduction .................................................................................... 4 SECTION 1.1: KEY FINDINGS ............................................................................................................. 5 Section 2: Macro-economic trends, food security and food prices ............. 3 AGRICULTURE .................................................................................................................................... 6 MARKET STRUCTURE ........................................................................................................................ 8 FOOD PRICES ..................................................................................................................................... 9 CHANGES IN ACCESSIBILITY AREAS ACROSS SYRIA ..................................................................... 14 Section 3: Assessment Methodology and Quick Facts ................................ 15 Section 4: Lattakia Key Findings ................................................................... 16 Section 5: Tartous Key Findings .................................................................... 22 Section 6: Homs Key Findings ........................................................................ 28 Section 7: Market Performance Index ......................................................... .34 Section 8: Conclusion .................................................................................... .35 RECOMMENDATIONS ..................................................................................................................... 35 References ...................................................................................................... 36 Acronyms ........................................................................................................ 37 Photo Credits .................................................................................................. 37 June 2018 | Syria Market Assessment, Part 1: Lattakia, Tartous & Homs Acknowledgements This market assessment would not have been possible without the support of mainy actors in Syria. WFP would like to acknowledge and thank the following agencies/people for the support they provided, enabling the assessment to take place. In particular The Syria’s Arab Red Crescent (SARC) for the support in facilitating interviews with traders; The Ministry of Internal Trade and Consumer Protection, The Ministry of Agriculture and Agrarian Reform and The Ministry of Economy and External Trade for agreeing to meet and in providing useful information on trade; The United Nations Food and Agriculture Organization (FAO) for the provision of data on agriculture; WFP staff in the Field Offices for the time and effort dedicated to collecting the information; and last but not least to the traders themselves for the time they freefully gave to answer the survey questions. To all a big thank you from WFP. June 2018 | Syria Market Assessment, Part 1: Lattakia, Tartous & Homs Section 1: Introduction Prior to 2011 Syria was seen as one of the most advanced and developed economies in the Middle-East. It was a middle income country with a GDP per capita of USD 2,058 (PPP) in 2007 (World Bank - WB) and an HDI of 0.6 in 2010 (ranked 120th in the world - UNDP). In 2010 the country’s GDP growth rate was 4.4% (IMF), inflation was 4.8% (Central Bank of Syria– CBoS) and the unemployment rate was 8.4% (Syrian Central Bureau of Statistics - CBS). Seven years of conflict have left over 500,000 people dead, an estimated 6 million people as refugees and a further 6 million people are estimated to be internally displaced inside Syria. This assessment forms part of a wider WFP country strategy Entire neighbourhoods have been left in ruin and key to conduct market assessments in every governorate of Syria infrastructure such as roads, irrigation pipes, water wells, to sense if markets in the country are functioning adequately electricity lines, mills, silos and factories have been damaged for WFP to switch from in-kind to market-based solutions. or destroyed. The conflict has deeply re-shaped the country. Other market assessments covering other governorates are Nevertheless, in the last period especially the last 12 months, planned for end 2018 and much of 2019. This report is Syria seems to be stabilizing economically and politically. therefore a ‘living’ document that will be changed/updated as Areas of active conflict have drastically reduced. In 2015 the findings from new market assessments in other governorates government of Syria had influence over an estimated 20% of become available. the country, now this has increased to over 70%. The number As the first market assessment WFP is conducting in Syria of people living in besiegement has also drastically reduced since the start of the conflict in 2011, it was decided to cover from 2 million in 2016 to 8,100 people at present (June 2018). the governorates with the country’s sea port areas of Lattakia Syria is still far from a secured path to recovery. Inflation rates and Tartous as well as the key central governorate of Homs. remain high including high food prices, the Syrian Pound These governorates form the backbone to much of Syria’s remains seriously devalued and the country is still heavily trade. While export has greatly reduced compared to the pre- impacted by international sanctions restricting external trade crisis period, the ports of Lattakia and Tartous remain vital and limits the country’s access to foreign direct investment. functioning lifelines for the country, importing food items and thereby helping to support the country’s food security needs. Yet since January 2017 Syria has seen notable improvements suggesting an economic recovery may be starting. After Due to its central location and its proximity to the ports and reaching its lowest GDP growth rate, -24.8% in 2013, the to the capital Damascus, Homs governorate is strategically Central Bank of Syria estimates that Syria’s GDP growth rate located to facilitate much of the food transported across Syria was –3.4% in 2016. Inflation reportedly peaked at 89.6% in be it from west to east, north to south and vice versa. It was 2013 however it was last estimated at 27.1% in May 2018 therefore a key governorate to assess. (CBS). WFP’s own food price analysis has shown that food Findings from this report are based on over 270 interviews prices peaked in December 2016 and have since started to with traders of various trade size: wholesalers, medium sized fall. Also the national currency, the Syrian Pound, has traders and retailers. Interviews were also conducted with key strengthened in the last year, recovering from SYP 515 to one informants, including with The Syrian Arab Red Crescent USD to now stand at SYP 434 to one USD. (SARC) and key Government Ministries. This market In light of these improving economic trends WFP wanted to assessment assessed 39 markets in 13 districts across 3 better understand the extent of market recovery in Syria. In governorates. The assessments’ findings are derived from particular WFP conducted this market assessment with the primary collected quantitative and qualitative data as well as objective to assess whether the Syrian market environment from secondary sources. would support some of WFP’s food assistance interventions to The report is structured as follows: after the introduction and be directed through market-based solutions without any of the key findings, the report reviews the macro-economic the undesired side-effects such as food price inflation, stock- situation in the country as well as providing an overview of outs and increases in beneficiary vulnerability, taking place. the agriculture sector in Syria. A review of the country’s supply Therefore, in April 2018 WFP conducted a market assessment chain for key WFP commodities is provided followed by a covering Western Syria (Homs, Lattakia and Tartous). The review of the food price situation. The report then delves into market assessment assessed market functionality and trade presenting the primary data findings divided by governorate flows of four main food commodities: wheat flour, rice, lentils and the Market Suitability Index is presented assessing and vegetable oil. These commodities were selected as they markets’ feasibility for possible market-based interventions form key commodities of WFP’s food basket. before the conclusion and recommendation section. June 2018 | Syria Market Assessment, Part 1: Lattakia, Tartous & Homs Section 1.1: Key Findings Syria’s 2016-17 wheat harvest, the country’s key staple food, was estimated at 1.8 million MT. The country requires 3.3 million MT of wheat annually to be self-sufficient (CFSAM 2017). The 2017-18 harvest is expected to be lower than last year’s harvest due to erratic rainfall patterns which destroyed much of the rain-fed crops in Al-Hasakeh, Ar-Raqqa, parts of Aleppo, Hama and Homs. Farmers, smallholders and livestock owners will be the worst affected by the failed crops due to reduced revenue and higher prices for animal feed. The fall in the 2017-18 wheat harvest however is not expected to affect food availability on Syrian markets. Syria is a large importer of food, importing on average 21% of its annual food needs since the start of the crisis in 2011. Furthermore in 2017, Syria struck a deal with Russia for the supply of 1 million MT of wheat per year over 3 years (2017-19). Due to the
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