WFP VAM-Food Security Analysis Ethiopia Monthly Market Watch, December 2020

WFP VAM | Food Security Analysis Ethiopia Monthly Market Watch, December 2020

HIGHLIGHTS

• General inflation remained high in November 2020 at 19 percent, albeit 0.3 percent lower than in October. Food inflation also slighlty declined at 22.1 percent. Since February 2020, the prices of cereals and bread increased by 24.3 percent before a marginal downward trend in November. This decline may continue in the upcoming months with the arrival of Meher harvest.

• The Birr devaluated by 27.1 percent against the US dollar and depreciated at 18.4 percent in the parallel market since November 2019. The differential between unofficial and official market rates narrowed from 40 percent in November 2019 to 30.5 percent in November 2020. Birr’s continued weakening in the parallel market is likely to temporarily affect food access of cash beneficiaries, leading to a rise in domestic food prices for imported items and domestic food prices in general. This is particularly true in Somali Region markets that are highly dependent on imported food items.

• The prices of food commodities escalated compared to pre-crisis levels in Tigray Region, despite cash shortages due to disrupted bank services and supply chain interruptions. The security situation has contributed to food shortages, which disrupt both upstream input markets and downstream output markets, thus deterring food production, commercialization and stock management.

• The price of wheat flour continued to rise in the Somali Region since August 2020, echoing the international market price increase. This continued trend is likely to decrease wheat flour available in the markets and could trigger price volatility.

• The minimum expenditure an average household in Somali Region requires to meet its food needs increased by 11 percent to ETB 838 per person per month in November 2020.

• The maize to shoats terms of trade (ToT) slightly improved in November 2020 in favour of pastoralists who sell sheep and goat and buy maize.

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Source : reliefweb