Well above average staple food prices expected to drive high 2019 assistance needs
IPC 2.0 Acute Food Insecurity Phase
IPC 2.0 Acute Food Insecurity Phase
IPC 2.0 Acute Food Insecurity Phase
current or programmed humanitarian assistance
IPC 2.0 Acute Food Insecurity Phase
current or programmed humanitarian assistance
The November-December main season millet and sorghum harvest is ongoing in Sudan. Rainfall during the June to September season was well above average and supported favorable crop yields across the country, with the exception of isolated areas where prolonged dry spells or flooding occurred. Although such rainfall performance would typically have led to an above-average harvest, macroeconomic issues over the past year have negatively impacted both the planting and harvesting of crops, and production is estimated to be average as a result.
In late 2017, the Government of Sudan begun to implement significant changes to their economic policy in response to persistent, long-term difficulties accessing foreign exchange. Among these changes were the removal of subsidies for wheat and wheat flour imports and devaluation of the Sudanese Pound (SDG) from 6.7 SDG/USD to 30 SDG/USD in February 2018. By mid-2018, at the start of the agricultural planting season, fuel shortages were occurring, and this led to lower area cultivated in some parts of the semi-mechanized areas.
By October 2018, Sudan further devaluated its currency to 47.5 SDG/USD, though by early December it had depreciated to 70 SGD/USD on the parallel market. The continued shortage of hard currency and the rapid depreciation of the SDG have significantly reduced the private sector and government’s ability to import essential raw materials, including fuel. Consequently, the ongoing harvesting period is also being negatively impacted by low fuel supply and high prices, particularly in central and eastern semi-mechanized areas. Additionally, the high price of agricultural labor and the fact that farmers have prioritized sesame and groundnuts production is expected to result in delayed harvesting and some crop losses of sorghum and millet.
Preparations for the November to March winter season, which is the key season for wheat production in Sudan, started earlier than normal. Despite early preparations, farmers are raising concerns that the high cost of seeds, fertilizers, fuel, and the cash shortage are all preventing normal planting. The Ministry of Agriculture has set a target of 700,000 feddans cultivated, to result in an estimated 947,000 MT of winter wheat production. Approximately 65 percent of the target is within government-irrigated schemes in Al Jazeira and Halfa, while the remaining 35 percent is small scale cultivation in Northern, River Nile, White Nile, and Sennar States. Given the above-mentioned macroeconomic concerns, it is unlikely this target is being met.
The ongoing macroeconomic issues are also driving high prices for food and non-food items. The shortage of hard currency is constraining the capacity of the government and private sector to import agricultural inputs, medicines, and wheat grain among other commodities. Wheat flour shortages have been reported across the country, and prices of food and non-food
items have increased by 40-60 percent since October. The cost of transportation, which has increased 80 to 90 percent from last year, is contributing to higher commodity prices. According to the Central Bureau of Statistics (CBS), the national inflation rate was 68.9 percent in November 2018, compared to 24.8 percent in November 2017 and a five-year average of 27.1 percent.
The retail price of locally-produced main staples, namely sorghum and millet, are upwards of 160-230 percent above average as a result of the currency devaluation and high transport costs (Figures 1 and 2). Prices started to decline seasonally or remained stable with increased supply from the harvest, between August and October in most markets, though several markets saw unseasonable price increases in November. The retail price of locally-produced wheat is similarly high, at 135 percent above 2017 prices and 210 percent above the five-year average. Between October and November, the retail price of wheat has either remained stable or slightly increased as market supplies from March/April 2018 winter season harvest seasonally decline and macroeconomic challenges are resulting in lower volumes of wheat imports.
Although livestock and wage labor prices are also increasing, the rate of increase is less significant. Livestock prices have increased as a result of the devaluation of the SDG, as well as seasonally due to favorable livestock body conditions. Furthermore, high demand for local consumption and export of livestock continues to put upward pressure on prices. Despite this, livestock price increases are lower than the increase of cereal prices. In October, local goat prices were on average 90 percent above last year and 180 percent above average. Currently, the goat-to-sorghum terms of trade (ToT) are 25-50 percent lower than of same period last year (Figure 3) and 20-35 percent lower than the three-year average.
Agricultural labor wages have significantly increased during the harvesting period, though these increases are also smaller than staple food price increases. The increase in labor wage rates is driven by the fuel shortage and high fuel prices, which has driven high demand for labor as an alternative to machinery in semi-mechanized areas. Furthermore, laborers are demanding high wages as they face high staple food prices. Labor wages in November almost doubled compared to May 2018 and are about 170 percent above last year and the recent three-year average. Given relatively higher cereal prices, though, the labor wage-to-sorghum ToT across key markets are either similar to, or 25-30 percent lower than, last year and
three-year average. Furthermore, the high cost of labor is expected to increase the cost of wheat production during this season.
The security situation has remained relatively calm in the main conflict-affected areas of South Kordofan, Darfur, and Blue Nile states since the declared unilateral ceasefires by the Government of Sudan and main armed rebel groups in 2017, and the number of monthly conflict incidents has declined notably (Figure 4). Subsequently, new displacements have significantly reduced in 2018 compared to earlier years of higher conflict. The exception is Jebel Mara in Darfur where fighting between the Sudanese Armed Forces (SAF) and the Sudan Liberation Army – Abdel Wahid (SLA-AW) persists and some 15,000 to 20,000 people have been newly displaced during the first half of 2018. According to the International Organization for Migration (IOM), the majority of verified and registered new IDPs in Darfur were from Golo and Rokero areas in Central Darfur State. The Humanitarian Aid Commission (HCAC) of the Government of Sudan reports that the number of IDPs across Sudan has reduced from 2.3 million in 2017 to about 1.6 million as in November 2018, most of whom are protracted IDPs in Darfur. The relatively improved security situation and the favorable rains in 2018 has encouraged some IDPs to return to their areas of origin in Darfur and government-controlled areas of South Kordofan and Blue Nile states for cultivation. IOM reported the return of about 108,450 IDPs to their areas of origin in 2018.
The influx of South Sudanese refugees into bordering states of Sudan continues due to ongoing conflict and acute food insecurity in South Sudan, though the number of new arrivals recorded in October 2018 was the lowest monthly arrival rate in 2018, and it is expected this is due in part to the September 2018 signed peace deal in South Sudan and slight reduction in conflict. According to UNHCR, an estimated 764,400 South Sudanese refugees are residing in Sudan as of November 2018, of whom 30,420 arrived in 2018.
In October 2018, WFP provide food assistances to about 3.8 million beneficiaries in Sudan through distribution of 111,096 MT of assorted food commodities and cash-based transfers of 22.6 million USD. 57 percent of beneficiaries were IDPs, 12 percent were South Sudanese refugees, and 31 percent were residents in drought- and conflict-affected areas. It is expected this assistance is improving food security outcomes among beneficiaries; however, data on humanitarian assistance deliveries at the administrative level is not available and it is therefore not possible to determine where food security outcomes are likely at least one phase better due to humanitarian food assistance.
Food security has improved across much of the country in December with increased availability of food from local harvests. However, macroeconomic issues are driving worse outcomes than are typically seen during this time and many areas are Stressed (IPC Phase 2). In areas where poor households are highly dependent on markets to access food – either typically or because they experienced poor production this year – Crisis (IPC Phase 3) outcomes exist. These areas include much of North Darfur and Jebel Marra, parts of West Kordofan, North Kordofan, and South Kordofan, southern Blue Nile, northern Kassala, and much of Red Sea.
The December 2018 to May 2019 most likely scenario is based on the following national-level assumptions:
- Based on FEWS NET’s integrated projection, it is expected the Sudanese Pound (SDG) relative to the USD will remain within the range of 60-75 SDG/USD during the first quarter of 2019. No new, significant sources of USD revenue are likely in the short-term; although increased USD earnings are possible with indications that South Sudan could further increase oil production, from which Sudan receives pipeline and refinery fees, this revenue is expected to be negligible on the value of the SDG in the short to medium term.
- Fuel shortages are expected throughout the projection period at levels similar to current shortages, and prices of fuel are expected to be well above average. It is likely farmers in mechanized and semi-mechanized areas will be given priority to purchase fuel at official subsidized price, though many will not be able to purchase sufficient fuel due to shortages.
- The November to February main harvest is expected to be near average; although favorable rainfall led to high yields, the area planted was somewhat below average and harvesting activities face constraints due to macroeconomic issues include cash and fuel shortages and high labor prices. Prolonged dry spells also affected a few areas.
- Given the relatively shorter period of time for planting in the winter season relative to the main season, areas not cultivated on time are unlikely to be cultivated for the season. As a result, it is unlikely area targeted will be reached, though current cultivation is in line with average, and therefore average production is likely.
- Similarly, land preparation in April/May 2019 for 2019/2020 season is expected to be constrained by the continuing macroeconomic difficulties, and area cultivated is expected to be lower than normal.
- Based on FEWS NET’s integrated price projections, the retail price of sorghum and millet in key markets are anticipated to decline 5-10 percent between November and February, the post-harvest period, and begin increasing after April to levels similar to our slightly above current prices. Overall, local cereal prices are expected to be 50-100 percent above last year and 210-240 percent above the five-year average.
- Local goat prices, which are currently around 150 percent above average, are expected to remain relatively stable, though prices will decline slightly at the August-September peak of the lean season when market supply increases as households sell additional livestock to fund food purchases. Overall, goat prices are expected to remain 70-80 percent above last year and 150-180 percent above the five-year average.
- Based on the above, goat-to-cereal terms of trade are expected to remain 20-30 percent lower than last year and 40-60 percent below the five-year average.
- Agricultural labor opportunities are expected to be slightly lower than normal. Daily wage rates have nearly doubled compared to the same time last year as labors demand higher wages among rising prices. While many are still expected to work a typical number of days, some farmers will be unable to afford typical levels of labor and total opportunities will be lower than normal. Labor wages are expected to remain near current rates, at 100-150 percent above average. However, given that cereal price increases are somewhat more significant, labor-to-sorghum terms of trade are expected to remain slightly below average.
- Following the declaration of ceasefire in South Kordofan, Blue Nile, and parts of Greater Darfur in December 2017, conflict has been relatively lower in 2018 and this is lower level of conflict is expected to continue throughout the projection period. As a result, the scale of new internal displacement is expected to be lower than in 2017. The exception to this is in Jebel Marra of Darfur where frequent clashes between Government troops and the Sudan Liberation Movement – Abdel Wahid (SLM-AW) are expected to persist and lead to new displacement and disruption of typical livelihoods. Overall, the number of displaced people in Sudan is expected to remain around 2.1-2.5 million.
- Further new arrivals of refugees from South Sudan are expected throughout the projection period, albeit at lower rates than last year based on trends of lower influx in recent months. Overall, the number of South Sudanese refugees in Sudan is expected to be between 700,000 and 800,000.
- Based on WFP’s Operation Plan for humanitarian food assistance from November 2018 to May 2019, it is expected 3.8 million beneficiaries will be reached with 126,555 MT of food assistance and 22,395,000 USD worth of CBT. The majority of beneficiaries are IDPS in Darfur.
Most Likely Food Security Outcomes:
December 2018 to January 2019 is the main harvesting period in Sudan and food security outcomes typically improve for most poor households during this time due to a combination of access to food and income from own harvests, in-kind payments from agricultural labor, and improved purchasing power due to seasonal declines of staple food prices. However, this year food security improvements will be less significant and short lived, despite the average harvest in most areas. This is due to the persistent macroeconomic challenges that are expected to continue throughout the projection period. Many poor households obtain a portion of their food needs from market purchases even during the harvest and with below-average purchasing power, they will face difficulty purchasing normal levels of food and non-food items. As a result, many areas will be Stressed (IPC Phase 2) during this time, while much of North Darfur and Jebel Marra, parts of West Kordofan, North Kordofan, and South Kordofan, southern Blue Nile, northern Kassala, and much of Red Sea will be in Crisis (IPC Phase 3). There has been no recent nutrition survey data in the country. The November 2017 national Mid-Upper Arm Circumference (MUAC) screening showed recorded Global Acute Malnutrition (GAM) by MUAC of more than eleven percent in North Darfur, Red Sea, South Kordofan, Blue Nile, and Central Darfur states, indicative of Crisis (IPC Phase 3) or Emergency (IPC Phase 4) outcomes.
Between March and May 2019, food security will deteriorate somewhat in most areas as poor households begin to deplete household food stocks from the harvest and become seasonally dependent on markets. Based on the assumption that livestock and casual labor wages will not keep pace with staple food price increases, households will face below-average purchasing power throughout the projection period and difficulty purchasing sufficient food to meet their basic needs. Furthermore, poor households also faced high prices throughout 2018 and the further food price increases are expected to erode the capacity of households to cope through sustainable means. More areas are expected to face Crisis (IPC Phase 3) outcomes within North Darfur and North Kordofan, southern Blue Nile, northern Kassala and northern South Darfur states. Between March and May, Critical level of acute malnutrition (GAM (WHZ)>15%) is likely in several areas including those identified as having a MUAC around 11 percent in November 2017.
Of greatest concern are IDPs and poor households in SPLM-N controlled areas of South Kordofan and IDPs and conflict-affected households in Jebel Mara in Darfur. Food security among these populations has improved from the Emergency (IPC Phase 4) outcomes at the peak of the 2018 lean season to Crisis (IPC Phase 3) with the harvest, and they are expected to maintain Crisis (IPC Phase 3) through May. However, outcomes are likely to further deteriorate among these populations beyond the projection period, at the August/September peak of the 2019 lean season, to Emergency (IPC Phase 4).
For more information on the outlook for specific areas of concern, please click the download button at the top of the page for the full report.
About Scenario Development
To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more here.
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