• Inflation: The January Consumer Price Index (CPI) declined slightly in South-Central while remaining relatively stable in all other regions of the North. Annual inflation reduced in Somali shilling (SoSh) areas but increased somewhat in the regions using Somaliland shilling (SlSh). The minimum cost of living is significantly higher in SoSh zones whereas it is moderately elevated in SlSh area when compared to the base period (March 2007).
•Exchange rate between SoSh and the US Dollar (USD) gained marginal value over the first month of the year while the SlSh lost negligble ground to the greenback. Over the past year, SlSh has remarkably depreciated against the USD, while the SoSh has gained value. The annual appreciation of the SoSh is attributed to economic renaissance in the capital (Mogadishu), relative stability in most parts of the country, limited supply of the local currency notes and dollar inflows through humanitarian interventions and on-going foreign and local investments predominantly in the capital. The weakened SlSh is due to increased supply and circulation of new higher denomination currency notes.
•Local grain prices were mixed- decreased significantly in the key sorghum producing regions of Bay; slightly reduced in Juba, Central, Gedo and Hiran regions but remained relatively steady in all other regions. The decline in locally produced cereals mainly reflect good outturn of the 2012/13 Deyr seasonal harvests. Other factors affecting current cereal price trends included: increased cereal flows from surplus markets to deficit markets, low prices of imported food and humanitarian food supply. Overall, cereal prices remained well below the levels a year earlier.
• Prices of most imported commodities continued to decline in January in nearly all SoSh markets while remaining relatively stable in SlSh areas. Compared to the same period last year, imported commodity prices are significantly lower in SoSh markets but stable in SlSh regions. The decline in prices of imported food is a result of the appreciation of the local currency, enhanced port functioning and humanitarian assistance •Livestock prices remained stable to declining in most markets when compared to a month ago, in line with a seasonal pattern following the end of Hajj exports. Livestock prices are significantly higher than a year ago in all monitored markets as a result of improved body conditions and restocking.
•Labour wages sustained their levels or reduced slightly in many markets in line with seasonal reduction in agricultural labour opportunities after harvests in crop producing areas. Labour wages are significantly higher compared to their levels a year ago in most markets.
•Terms of Trade (ToT) between labour wage and cereals were mixed- mostly stable or decreased with the exceptions of increases in Bay and Juba. The purchasing power of the poor mostly relying on casual labour has improved over the past year as a result of lower cereal prices, improved local quality goat prices and higher labour wages.