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Highlights
Markets are functional. While there remain variations from market to market, Sri Lanka’s markets currently have a wide range of products, adequate physical availability of essential goods, a resilient supply chain and sufficient levels of hygiene and cleanliness. Although in September traders reported availability issues for cereal items, the dimension is showing lower risk levels in October and greater availability of commodities.
Both the availability and prices dimensions may be negatively impacted in the coming months by the Northeast monsoon and the high demand during the festive period.
Overall market functionality remains conducive to the use of cash-based transfers, while mitigation measures are essential to keep this from deteriorating. However, markets with especially high levels of risk associated with the use of cash-based transfers must remain flexible to shift to mixed modalities and/or in-kind food assistance.
Spikes and instability in prices continue to pose threats to market functionality in Sri Lanka. As with the previous months, markets are reporting concerns around price volatility. Over 80 percent of households are reporting issues in accessing food, according to WFP’s latest Household Food Security surveys. Consequently, households are forced to adopt food and livelihood coping strategies to put food on the table. Volatile and unpredictable prices can undermine the economic decision-making for producers and importers.
Several mitigation measures should be put in place to safeguard against price-related risks for cash-based transfers. These include continuing to strengthen market monitoring, and adapting to price fluctuations, such as by calculating the minimum expenditure basket, and adjusting the transfer values as needed.