Informing humanitarians worldwide 24/7 — a service provided by UN OCHA

Afghanistan + 22 more

Recent food price developments in most vulnerable countries - Issue No 1, Aug 2008

Attachments

The objective of this briefing note is to provide early warning information on recent price developments and their potential contribution to the cost of the food basket, using staple food commodities that are essential in terms of calorie contribution to households' food basket at individual country-level. The note is not meant for crosscountry comparison as the main staple food items and their calorie contributions to the food basket are different. As a working paper to be updated on a quarterly basis, further fine-tuning of the approach (see annex 2) will be taken into account in future issues. Table 1 summarizes the results.

1. Recent Price Patterns

- In 2008, staple food commodity prices are generally above their five-year seasonal averages, except for Burkina Faso (sorghum and millet), Mali (sorghum and millet), Cote d'Ivoire (maize), Burundi (sweet potatoes), Uganda (plantains/matoke and sweet potatoes) and Rwanda (Cassava, sweet potatoes, Irish potatoes and plantains).

- Seasonal price increases of the main energy contributors are particularly high in Eastern and Southern Africa (Ethiopia, Somalia, and Zimbabwe) and Asia (Afghanistan, Sri Lanka, Bangladesh, Cambodia and OPT) and to a lesser extent in West Africa, with Benin witnessing the highest seasonal price increases.

- The patterns of seasonal price increases since 2007 are generally similar to the 5-year seasonal pattern, suggesting major seasonal price increases occurred other the last 12 months (2007/2008).

- The most recent monthly price increase is generally higher than the year average in most of the countries, suggesting an upward trend of prices of major energy contributors, except in Mali (sorghum and millet), Cote d'Ivoire (yams) and Zimbabwe (maize).

2. Potential Impact on the Cost of the Food Basket

Countries are classified into three categories, based on the cumulative contribution of average monthly price changes in 2008 to the cost of the food basket:

- Countries of serious concern (Category 1): Benin, Ethiopia, Somalia, Zimbabwe, Afghanistan, Sri Lanka, Bangladesh, Cambodia and Palestine(1). The situation in these countries is one of an alert because of the very high price increases of the major calorie contributors. They depend on few commodities that provide 30-50 percent in African countries and 50-80 percent in Asian and Middle East countries, of the calorie requirements of the population.

- Countries of concern (Category 2): Burkina Faso, Senegal, North Nigeria, Mozambique, Lao PDR, Sudan, Kenya, Pakistan, and El Salvador. The main concern in these countries relates to significant price increases of a single staple food commodity which provides at least a third of the population's calorie intake, except for Burkina Faso and North Nigeria where the calorie sources are relatively diverse.

- Countries to monitor (Category 3): Other countries not included in category 1 and 2 witnessing either moderate or low impacts on the cost of the food basket, are worth monitoring given their initial high level of vulnerability.

Price impact assessments are being (or should be) undertaken in the first two categories of countries to apprehend the extent to which households' food security situation has been affected and enable negative impact mitigation responses. A close monitoring of the situation is required in all these countries given the continued upward trend of key food commodity prices.