Somalia

Somalia Market Update: May 2022 Update (Issued June 24 , 2022)

Inflation: In Somali Shilling (SOS)-using areas, Consumer Price Index (CPI) increased in April and May 2022 (2-3%) in central, southern regions and northeast regions compared to a month ago. Compared to the five-year average for April and May (2017-2021), CPI increased significantly (43-51%) across all regions of Somalia due to increased prices of sorghum (the main local cereal used in the consumption basket) and increases in imported food prices this year.

In Somaliland Shilling (SLS)-using areas, CPI increased in April (3%) but remained relatively stable in May 2022 compared to a month ago in northwest regions. CPI increased (by 11-12%) in northwest regions compared to the five year average for April and May (2017-2021).

Exchange rate: In SOS-using areas of Somalia, the Exchange rates between SOS and the United States Dollar (USD) remained relatively stable in most regions in April and May 2022 compared to a month ago. Compared to the five-year averages for April and May (2017-2021), SOS depreciated at moderate rates (7-11%) in central and southern regions of the country in April and May 2022.

However, SOS depreciated significantly against the USD in northeast region (31-32%) in April and May 2022 due to continued circulation of large amounts of local version of the SOS currency notes in these markets in recent years. Consequently, it has limited acceptance among traders and communities in the northeast regions.

In SLS-using areas, the exchange rate between SLS and USD remained stable in April and May 2022 compared to a month ago but appreciated slightly (3-4%) compared to the five-year average for April and May (2017-2021).

Local cereal (white maize, red sorghum and white sorghum prices): Local cereal prices mostly exhibited mild (≤10%) changes in most regions of the country in both April and May 2022 compared to a month ago. Compared to the five-year averages for April and May (2017-2021), local cereal prices were substantially higher (25-105%) in most regions due to reduced supply this year. Specifically, white maize prices increased in Banadir (92% in April & 73% in May), Juba (51% in April & 47% in May) and Shabelle (91% in April & 80% in May). Markets that recorded significant increases in white maize prices in April and May compared to five-year averages include Jowhar of Middle Shabelle (96-112%), Wanlaweyne of Lower Shabelle (69-95%), Qorioley of Lower Shabelle (108-114%), and Jamame of Lower Juba (81-99%). Red sorghum prices increased in central (54-68%), northeast (61-72%) and Sorghum Belt (91-105%); red sorghum prices were also significantly higher in April and May compared to five-year averages in El-Barde of Bakool (101-138%), Baidoa of Bay (128-148%), Dinsor of Bay (237-318%), Qansah-Dhere of Bay (245-261) and Bardera of Gedo (122-140%). White sorghum prices increased in April and May in northwest (25-38%) and Hiran (44-52%) compared to five-year averages.

Prices of imported food items (rice, sugar, vegetable oil, wheat flour) exhibited mild (≤11%) changes (mostly increases) in both April and May 2022 compared to a month ago across most regions of Somalia for most food imports. This is mostly attributable to rising global food prices. Compared to the five-year average(2017-2021), prices of most food imports were higher in most regions of Somalia: southern regions (18-35% for rice, 26-36% for sugar, 78-157% for vegetable oil and 24-59% for wheat flour); central regions (24-30% for rice, 22-29% for sugar, 64-68% for vegetable oil and 41-42% for wheat flour); and northwest (15-20% for rice, 7-10% for sugar, 56-71% for vegetable oil and 10-12% for wheat flour). These price increases are mainly due to rising food prices on the international market this year.

Prices of imported food items were also significantly higher compared to the five-year averages for April and May (2017-2021) in northeast markets (60-62% for rice, (48-49%) for sugar, 151-160% for vegetable oil and 72-73% for wheat flour). This is mainly due to depreciation of the local SOS currency as well as rising food prices on the international market this year.

Livestock (local quality goat and camel) prices exhibited mild (≤10%) to moderate (10-24%), mostly for goat) monthly price changes (mostly increases). Compared to the five-year average, livestock prices in April and May 2022 exhibited a mixed trend: goat prices were lower in April and May in Sorghum-Belt (10-20%) and Banadir (11% in April) due to deterioration of body conditions but prices remained above the five-year average in other regions: Juba (9-12%), Shabelle (1-9%), central (8-10%), and northwest (3-5%). Goat price increases were even higher in northeast regions (55-61%) due to depreciation of the local currency and limited market supply. Similarly, camel prices increased in both April and May 2022 above the five-year averages in most regions: Shabelle (12% in May), Juba (38-39% both April & May), Central (10-12%), northwest (4-7%) in and northeast (49-51%).

Milk prices (camel and cattle) mostly increased at mild ((≤10%) to moderate rates (11-28% in April and May 2022 compared to a month ago in most regions of the country due to reduced milk availability as a result of persistent drought conditions. Compared to the five-year average for April and May (2017-2021), cattle milk prices mostly exhibited moderate to high increases in most regions: south (17-49%), northwest (17-20%), northeast (1-22%) and central (50-52%) but were moderately lower in Banadir (26-32%). On the other hand, compared to the five-year averages, camel milk prices mostly exhibited increases in south (11-68%) and northeast (30-36%), northwest (6-10%) and central (4-16%) but declined in Banadir (9% in both April & May) due well increased supply from established (camel) dairy farms around Mogadishu in recent years.

Labour (unskilled) wages remained relatively stable or changed at mild rates (≤± 10%) in most regions across the country in both April and May 2022. Compared to the five-year average, labor wages are higher (2-70%) in most regions in both April and May 2022. However, labour wage rates were lower in Juba (2-7%) compared to the five-year average for both April and May due to limited labour opportunities in the region as a result of active conflict.

Terms of Trade (ToT) between daily labour wage and cereals either remained stable or declined by 1kg across all regions in April and May 2022 due to higher cereal prices and/or lower labour wage rates. Compared to the five-year average for April and May (2017-2021), ToT between daily labor and cereals mostly declined (1-5kgs) in most regions attributable to higher cereal prices this year. Similarly, the ToT between local quality goat and cereal prices exhibited mostly a decreasing trend in April and May 2022 across the country due to high cereal prices. Compared to the five-year average for April and May (2017-2021), the ToT between local quality goat and cereals was lower in southern regions (27-62%), central regions (13-15%) and northwest regions (12%) attributable to higher cereal prices this year while TOT remained stable in northeast regions in April but decreased (4%) in May 2022.

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