Somalia Market Update: September 2019 Update (Issued October 23, 2019)
Inflation: SoSh (Somali Shilling)-using areas: Compared to one month ago, Consumer Price Index (CPI) changed mildly (1-3%) in September 2019. Compared to the five-year average (2014-2018), CPI increased moderately in southern Somalia (9%) and northeast (12%), attributable to higher prices of commodities, especially cereals, in the Minimum Expenditure Basket (MEB) this year.
SISh (Somaliland Shilling)-using areas: CPI remained relatively stable in September 2019 but increased by 12 percent compared to the five-year average.
Exchange rate: SoSh-using areas: The exchange rates between SoSh and the United States Dollar (USD) remained relatively stable in most regions of the country in September 2019. Compared to the five-year average, SoSh exhibited a moderate to significant depreciation (8-32%) in all regions of the country with the highest depreciation reported in the northeast mainly due to increased injection of newly printed local currency into over the past two years.
SISh-using areas: local currency in Somaliland Shilling using areas exhibited relative stability against USD in September 2019 but as well as in comparison to the five-year average.
Local cereal (white maize, red sorghum and white sorghum) prices either remained relatively stable or exhibited mild (≤8%) monthly increases in September 2019 in most parts of the country. The mild increases are due to dwindling supply as a result of the poor 2019 Gu season cereal harvest and limited carryover stocks from previous seasons.
Compared to the five-year average, September 2019 local cereal prices are higher (5-24%) in all the regions across the country.
Prices of imported food (rice, sugar, vegetable oil, wheat flour) mostly exhibited relative stability or mild monthly changes (≤ ±10%) in local currency terms in September 2019 in most Southern regions of Somalia compared to both last month and the five-year averages. In the northern parts of the country, the prices of most food imports remained relatively stable from last month but exhibited mild to moderate increases (3-17%) compared to the five-year average.
Livestock prices for local quality goat and camel mostly exhibited mild to moderate (<8%) monthly declines in the southern regions due to reduced demand following the end of the Hajj festive period and seasonal deterioration of livestock body condition during Hagaa. Relative price stability to mild monthly changes (+/-4%) in livestock prices were recorded in northern regions in September 2019. Compared to the five-year average, livestock prices exhibited mild to moderate increases (5-19%) across the country. Milk prices (camel and cattle) exhibited mild increases (+/- less than 10%) in most regions of the country both in September 2019 and compared to the five-year average.
Labor (unskilled) wages remained relatively stable (+/-2%) in the southern regions of Somalia but slightly increased (5-10%) in central and northwest regions in September 2019. Compared to the five-year average, labor wages decreased (3-6%) in the Sorghum Belt and Shabelle regions but increased slightly (4%) in the Juba Valley and moderately to significantly (11-37%) in central and northern regions due to depreciation of the local currency in recent years.
Terms of Trade (ToT) between daily labor wage and cereals either remained relatively stable or changed mildly (by +/- 1-2kgs/daily wage) in most regions of the country in September 2019. Similarly, the labor wage to cereals ToT remained relatively stable or decreased mildly in most regions of the country compared to the five-year average (2014-2018), with the exception of central and northwest regions where ToT increased (by 2-4kgs/daily) owing to the increase in labor wage rates. The ToT between local quality goat and cereals exhibited mild monthly changes (≤ ± 10%) in most regions of the country. Five-year average comparisons mostly indicate lower ToT between goat and cereals in most regions of Somalia due to higher cereal prices in September 2019.