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Burundi + 9 more

Eastern Africa Market and Trade Update 2024 Quarter 4 - Joint RAM and Procurement, January 2025

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Highlights

• In December 2024, global cereal prices showed mixed trends. Wheat and rice prices declined due to strong harvests and weak demand, while maize prices rose slightly amid tight U.S. supplies and high demand for Ukrainian exports. Rice prices dropped sharply due to reduced demand and currency depreciation in key exporting countries. Overall, record-high production and favorable crop forecasts contributed to a downward trend in global cereal prices.

• In late 2024, cereal and pulse prices varied across Eastern Africa. Maize prices rose in Rwanda,
South Sudan, and Tanzania due to stock depletion and export demand, while Ethiopia saw declines from harvest stock releases. Prices of bean declined in Uganda (USD 975/MT) and Kenya (USD 1,436/MT), remained lowest in Rwanda (USD 719/MT), and slightly increased in Tanzania (USD 999/ MT). Sorghum prices stayed high (USD 313–370/MT) due to strong demand, inflation, and conflict in Ethiopia and Sudan. Early 2025 local harvests are expected to ease maize and pulse prices.

• In 2024, global and regional fuel prices showed mixed trends. Brent crude fell to USD 70/bbl in December, down 5 percent month-on-month (m-o-m) and 3.3 percent year-on-year (y-o-y). Pump prices remained stable or declined in most Eastern African countries, except in Sudan and South Sudan. Petrol prices in Sudan surged by 36.7 percent m-o-m and 208.4 percent y-o-y (USD 3.1/L) due to supply disruptions. In South Sudan’s prices quadrupled y-o-y (USD 2.3/L) amidst high inflation and currency depreciation. Fuel remained costly in Burundi due to scarcity and severe depreciation.
Meanwhile, Somalia, Uganda, and Kenya recorded y-o-y declines of 20.4, 10.4, and 16.9 percent, respectively, aided by lower global prices, currency gains, and policy interventions.

• Macroeconomic conditions in Eastern Africa remained challenging in the fourth quarter of 2024, with most local currencies depreciating against the U.S. dollar (USD), except in Kenya and Uganda.
As of December, Sudan and South Sudan experienced the steepest currency depreciations in parallel markets (77.4 percent and 55 percent y-o-y, respectively), driven by prolonged conflict and economic instability. Ethiopia’s Birr also declined against the USD by 20 percent in the parallel market y-o-y, while Burundi’s currency depreciated by 36 percent. Conversely, the Kenyan shilling strengthened by 19.5 percent, supported by lower inflation policies, and Uganda’s shilling appreciated by 3 percent y-o-y due to foreign inflows and tight monetary policy.

• Regional inflation averaged 32.4 percent in December 2024, excluding South Sudan, where it likely hit triple digits. Sudan had the highest rate at 187.8 percent. Food inflation remained elevated at 9.1 percent on average, with Burundi (36.9 percent) and Ethiopia (18.7 percent) recording the highest levels.

• Food prices in Eastern Africa remained high in late 2024, with the average monthly food basket cost reaching USD 14.9 in December, up 1.6 percent m-o-m and 58.7 percent y-o-y. South Sudan saw the sharpest rise (up 313.1 percent), followed by Sudan (135.5 percent), despite lower cereal prices postharvest. Cereal prices increased notably in Burundi (13.2 percent m-o-m) and Kenya (8 percent).
Vegetable oil prices stayed high y-o-y, especially in Burundi (43.2 percent) and Rwanda (17.4 percent), while bean prices surged due to economic pressures and high input costs.

• In December 2024, staple cereal prices in most Eastern African markets were stable or lower than the 5-year average. However, in Sudan, South Sudan, Burundi, and Ethiopia, conflict and economic challenges pushed prices over 400 percent above the average.