Somalia: Monthly Market Data Update - November, 2010
- The Consumer Price Index (CPI), which measures changes in the price of commodities included in Minimum Basket in Somalia, increased in all regions of the country during the month of November 2010. From the previous month, the inflation accelerated rapidly by 11% in the South, while increasing marginally (3-4%) in Northeast and Central and remaining relatively stable in Northwest. The CPI increase in Somali Shilling zone is mainly attributed to sorghum, sugar, cooking oil and milk prices dynamics, which together account for a large portion of the cost of the basket across Somalia (42-66%).
- The prices of locally produced cereals (maize and red sorghum) have risen significantly since October this year in the cereal producing regions of the South, due to increased trader hoarding in view of expected Deyr harvest failure. In particular, maize prices have increased by 46-56% in main maize producing southern regions of Juba and Shabelle. For the same reason, sorghum prices have also increased rapidly by 24% in southern producing regions of the Sorghum Belt and most regions of the South (Banadir, Shabelle). Conversely, in Northwest local cereal prices have reduced due to recent good harvests in agropastoral areas of the zone. However, the prices increased slightly (1-6%) in November in the Northeast and Central regions, which are mostly reliant on rice consumption. In contrast, however, overall prices of most imported commodities continued to stabilize due to increased supply following the end of the monsoon season (July-September), with the exception of sugar and vegetable oil, which have increased moderately in the last month in line with international price increases.
- The relative purchasing power is significantly weaker in November 2010 compared to the previous month in most regions of the country, as a result of rising local cereal prices and decreased labour wage rates. Terms of Trade (ToT) between daily labour wage and cereal has shown particularly significant decline in southern regions of Shabelle (44%), Juba (40%) and Banadir (39%). Similarly, the ToT is lower compared to the same month last year in most regions of the country. Regardless of the foregoing trend, the highest ToT in November 2010 was still observed in cereal producing regions of Sorghum Belt, Shabelle and Juba (9-12 kgs cereal for daily wage), while the lowest persisted in Central (3kgs cereal for daily wage).
- In November 2010, exchange rates between both Somali currencies (SoSh and SlSh) and USD appreciated marginally in Northwest (3%), while remaining relatively stable in all other regions of the country. The appreciation and stability are partly attributable to increased foreign exchange earnings from livestock exports during the Hajj period.