Monthly Market Update Bulletin # 61 Feb 2013

SUMMARY:

  • By January 2013 cereal prices were either stable or increased in some markets due to high demand, replenishment of stocks by traders, imminent export to neighboring countries and expected bulk purchase by the Strategic Reserve Corporation.

  • Current average wholesale sorghum prices were about 153 percent higher than the five-year average and 27 percent higher than the same period last year.

  • Current sorghum prices (represented by Gadarif market) are lower than the export parity prices (Figure 2). This is mainly due to decreased value of local currency.

  • Current millet prices were 124 percent higher than the five-year average, while current wheat prices were 137 percent higher than the five-year average.

  • The national inflation rate declined slightly from 44.4 percent last month to 43.6 percent this month. The food inflation has decreased by about 6 percent compared to last month, while non-food item inflation increased by about 3 percent during the same period.

  • The terms of trade between cereals and livestock remained at the same level as last month and in favor of livestock owners.

  • In spite of 2012/13 bumper harvest, yielding an estimated 1.43 million tons of national cereal surplus, current cereal prices are perceived high by consumers and low by producers. The high inflation rate and the associated high cost of production including high labor cost during the harvest are the main reasons for this trend.