SUDAN MONTHLY MARKET UPDATE Produced by the Food & Agriculture Market Information System - Sudan The Food Security Technical Secretariat (FSTS) comprises The Food & Agriculture Market Information System - Sudan The Famine Early Warning Systems Network (FEWS NET) several government agencies that work together to ensure (FAMIS) collects crop, livestock, and horticultural and animal was created by USAID in 1985 to provide early warning of maximum coordination on food security. Housed in the products prices from major markets on a weekly basis. Using food emergencies. In partnership with international and Ministry of Agriculture and Irrigation, FSTS supports food a standard methodology that ensures accuracy and national agencies, FEWS NET monitors and analyzes data on security information systems, provides policy briefs, objectivity, FAMIS gathers data from a national network of weather, climate, agricultural production, prices, trade, and monitors policy impact, and analyzes food security at the market watchers through an SMS web platform. livelihoods in 36 countries. Reports are available at local level. www.fews.net. Figure 1: Nominal sorghum prices for Om Durman SUMMARY (Khartoum State) - Despite improved rainfall and crop performance in most 2008/09-2012/13 2012/132012/13 2013/14 parts of Sudan, staple food prices continued to increase between July and August-the peak of the May-to-September lean season. Prices remain well-above their respective 2013 350 300 and five-year average levels. 250 200 SDG/90 kg SDG/90 - Grain price trends were also influenced by the effects of 150 trade disruption in some areas due to insecurity and blockage 100 of roads by heavy rains and high costs of transport due to high 50 inflation. 0 NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT - The monthly inflation rate remained high despite a small decline from 47 to 46 percent between July and August. Figure 2: Macro-economic data Terms of trade between grains and livestock is still in favor of cereal traders, however, the above average rains germinated NominalNational Inflation Inflation – – SDG/USDSDG/USD Exchange Exchange rate rate enough pasture and availed sufficient drinking water that can 50 5.80000 extend the seasonal grazing of livestock in the northern parts 5.75000 40 by additional 1-2 months. 5.70000 30 5.65000 - Sorghum and millet prices will start the seasonal gradual 5.60000 20 SDG/USD decline from September as early maturing crops become National Inflation National 5.55000 10 available to households. Prices are then expected to decline 5.50000 typically further during the November-to-January harvest 0 5.45000 period. However, prices likely not to decline below SDG 250 per sack-the in kind repayment for loans fixed by Agricultural GONZÁLEZ FARRAN/UNAMID ALBERT (2), LEFT: FROM SHEEP.1001 © IBMTRIGUEROS, SALAHALDEEN NADIR/WORLD BANK Bank of Sudan due to 30-40 percent increase in total cost of Source: The Food & Agriculture Market Information System (www.farmers.sd) and the Central Bureau of Statistics (CBS) www.cbs.gov.sd International prices are from USDA and production compared to last year. International Grain Council, www.fao.org/es/esc/prices/ Exchange rate is from Central Bank of Sudan www.cbos.gov.sd This report, produced by FAMIS with technical and financial support from FSTS and FEWS NET,is available at www.farmers.sd. For more information, contact [email protected]. BULLETIN 80 September 2014 PAGE 1 MARKET ANALYSIS Despite a favorable progression of the 2014/15 rainy season in Sudan, trader and household stocks remain well below-average due to below-average production during the 2013/14 agricultural season. Although earlier forecasts indicated below-average to average precipitation in 2014/15, actual June to September rainfall precipitation was average to above average in most parts of the country. Favorable growing conditions (rainfall performance) encouraged farmers to expand area under cultivation this years to above average levels in surplus producing areas of eastern, central and western parts of Sudan. Due to very low trader and household stock levels at the peak of the lean season in August, coupled with very strong household-level market demand, these improved growing conditions have not had an impact on grain prices in Sudan. Heavy rains and prevailing insecurity conditions in some parts of Darfur region during August further disturbed road transport between markets and further reduced supplies between markets. However, subsidized grain sales by the strategic reserve (250 SDG/90 KG sac) in East and South Darfur states contributed to food availability in those areas. Sorghum prices continued to increase across most markets between July and August. Price increased between 5 to 14 percent in most markets. The highest increases (up to 15 percent) were reported in Kassala, El Obied, and Ad Damzine, and El Gadarif . As the market becomes the main source of food even for most of the productive families during this time of the year (July to August) the domestic demand increases beside the already high demand for animal feeds. Prices stabilized or slightly decreased in Kadugli and Zalengei due to relief distribution. August sorghum prices were on average 88 percent above their respective 2013 levels and 132 percent above the five-year average. Despite the soaring local sorghum prices, August sorghum prices in Sudan were still below regional (e.g. Eritrea and South Sudan) market prices, and thus still cross-boarder trade from Sudan to these countries still ongoing. Millet prices have been high in 2014 (in the range of SDG 600 - 700 per sack) in the main millet producing and consuming zones of Darfur and Kordofan states as well as in main grain producing zones in eastern, central and western Sudan in August. Between July and August millet prices, increased 11 percent in Omdurman (Khartoum state) and Gadarif and by five percent in El Obied. August levels of millet prices were 124 percent higher than the same period last year and over 206 percent above the five-year average. Locally produced wheat prices increased between 3 to 28 percent between July and August. Prices increased by 28 percent in Zalengi (Central Darfur State) and by 20 percent in Om Durman and Geneina, this was mainly attributed to reduced market supplies resulted from depleted stock. Current levels of wheat prices are on average 60 percent above their respective for the last year and over 143 percent above the five-year average. Imported wheat from international markets remain available. The national inflation rate slightly reduced from 47 to 46 percent. However, this is considerably high and led to continued increase in cost of living especially for the poorest household’s groups. According to the central bureau of statistics, the food commodities and services prices has increased by about 41.5 percent in the first eight months of 2014 compared to that of 2013. The terms of trade (ToT) between livestock and sorghum continued to decrease in August ToT in Gadarif have decreased from 600 kg of sorghum per head of sheep in August 2013 to 307 kg in August 2014. The sharp increase of cereal prices is the major deriver of this trend; however, the above average rains germinated enough pasture and availed sufficient drinking water that can extend the seasonal grazing of livestock in the northern parts by additional 1-2 months BULLETIN 80 September 2014 PAGE 2 NOMINAL AND REAL WHOLESALE PRICES OF NOMINAL AND REAL WHOLESALE PRICES OF CEREAL & TERMS OF TRADE AND SHEEP PRICES Figure 3: Real versus nominal sorghum prices Om Durman, Figure 4: Sorghum Regional Comparison (Khartoum State) Aweil (S. Sudan) – – Mekele (Ethiopia) … Qadarif Nominal Prices Real Prices Nominal Prices – – Real Prices 1.8 400 1.6 350 80 1.4 300 1.2 60 250 1 200 0.8 40 $/kg US 150 0.6 Real Prices Real Nominal Prices Nominal 100 20 0.4 50 0.2 0 0 0 5. Real versus nominal livestock prices in Omdurman, (Khartoum State) Figure 5. Real versus nominal livestock prices in Om Durman, Figure 6. Sheep for Sorghum (Kg) Terms of Trade (Khartoum State) Nominal Prices Real Prices Nominal Prices – – Real Prices Al Qadarif – – Om Durman Al Qadarif Om Durman 2000 1000 80 1600 800 60 1200 600 40 800 400 Real PricesReal Nominal PricesNominal 400 20 200 0 0 0 Figure 7. Nominal sorghum prices in the surplus producing areas of Figure 8. Nominal sorghum prices in the main consuming areas of the country the country AdAd -Damazin – – SinnarSinnar … Al QadarifAl Qadarif El FasherEl Fasher – – Port SudanPort Sudan … El ObeidEl Obeid 500400 500 350 400 400 300 300250 300 200 200 200 SDG/90kg 150 SDG/90kg 100100 100 50 0 0 0 Figure 10: Real versus nominal wheat prices Om Durman, Figure 9. Nominal millet prices in Darfur States (Khartoum State) El Fasher Nyala … Geneina El Fasher – – Nyala Geneina Real PricesNominal Prices Series1 – – Real Prices 700 500 600 400 500 300 400 300 200 SDG/90kg 200 Prices Nominal 100 100 0 0 SEASONAL CALENDAR AND KEY MARKETS BULLETIN 80 September 2014 PAGE 3 SEASONAL CALENDAR AND KEY MARKETS MONITORED IN THE REPORT 11. Seasonal Calendar Insert figure 11 with map (below) MARKET OUTLOOK Upcoming millet and sorghum harvests (2014/15) are currently projected to be above average harvest resulting in improved supplies for local markets and for export to neighboring countries and Gulf States. Cereal prices likely to start gradually seasonally decreasing with the start of the new harvest in October/December and resulting reduction in rural household market dependence. Nevertheless,Figure the 12. availability Map of Sudan ofwith very key marketslow carry monitored-over in stocks the report coupled with a 30 - 40 percent increase in the cost of grain production induced by high inflation this year are likely to maintain prices above their respective 2013 levels However, prices likely not to decline below SDG 250 per sack, which is the price of in-kind repayments for loans fixed by Agricultural Bank of Sudan.