GIEWS Update: The Sudan - Fuel shortages and high prices of agricultural inputs affecting planting of 2018 crops (11 September 2018)

Highlights:

• Fuel shortages are reported in several areas in the country, triggering sharp price increases in the parallel market.

• Prices of most agricultural inputs surged in the last 12 months to more than twice their year-earlier levels.

• Availability and access constraints to fuel and agricultural inputs are mainly caused by the depreciation of the Sudanese Pound and dwindling foreign currency reserves that have affected imports.

• Despite the provision of fuel by the Government to the agriculture sector, supply shortages have affected land preparation, planting and weeding operations.

Overview

Since late 2017, the Sudan has been facing significant macro-economic challenges, illustrated by a spiralling parallel foreign exchange rate, dwindling foreign currency reserves as well as high and increasing inflation rates, which are expected to cause a slowdown in economic growth in 2018. The difficult macro‑economic environment has resulted in reduced imports of fuel and agricultural inputs.

To gauge the availability and access constraints that farmers have faced in procuring critical inputs for the 2018 crops planted in July-August and for harvest from November, FAO, jointly with the Government, conducted an agricultural input survey in Khartoum in July. About 100 structured interviews were carried out with agricultural input traders, service providers and key informants. In addition, this information was supplemented with data collected from the recently‑concluded country-wide 2018 Mid‑Season Assessment, jointly implemented by the Government and FAO, with the participation of WFP, USAID and FEWSNET.

The data indicate that, despite the efforts of the Government to provide fuel for the agricultural sector, supply shortages affected land preparation, planting and weeding operations in several cropping areas. Notably, in El Gedaref, Blue Nile and White Nile states, key crop-producing areas in the southeast, only between 40 and 65 percent of the fuel required for planting had been provided by the Government as of early August, and farmers with adequate financial capacity had to rely on the parallel market, where the prevailing fuel price is about four times higher than the official petrol price of SDG 6.17 per litre. In addition, high prices of agricultural inputs, including fertilizers, herbicides and pesticides, will likely result in a lower application, which is expected to negatively impact yields and output of the 2018 crop. Production costs are also anticipated to rise, adding further upward pressure on the already high cereal prices. Adequate fuel supplies for weeding, herbicide and pesticide application, as well as harvesting operations, will be crucial for the outcome of the 2018 agricultural season, and, therefore, a close monitoring of the situation is warranted.