Attachments
Key messages
- The key drivers of food insecurity have shown signs of improvement during Q1-2023. These include the decrease in global and local prices of food and fuel, the deceleration in currency depreciation in IRG-controlled areas, improved availability of fuel in local markets and reduced conflict.
- People's access to food has slightly improved. Nonetheless, around 46 percent of the surveyed households in Yemen indicated inadequate food consumption at the end of Q1-2023.
- WFP is currently facing severe funding shortfalls which could result in reductions in assistance.
Summary
Conflict: The UN-mediated truce continued to deliver much needed benefits to the Yemeni population, even after its official expiration in early October 2022. Due to military de-escalation, the number of civilian casualties and the level of displacement during Q1-2023 were nearly half the records observed in Q1-2022 (pre-truce period). However, armed violence relatively escalated compared to the previous quarter and limited clashes continued to be reported along several frontlines, particularly in Ma’rib, Ta’iz and Shabwah.
Exchange rate: In IRG-controlled areas, the Yemeni riyal slightly depreciated against the US dollar by four percent since the beginning of 2023 and by three percent year-on-year. In general, depreciation of the riyal decelerated during 2022 and Q1-2023 compared to 2021, largely due to the foreign currency auctions introduced by the Central Bank of Yemen (CBY) in Aden since late 2021. In February 2023, the Kingdom of Saudi Arabia (KSA) granted CBY Aden USD one billion which were deposited at the Arab Monetary Fund and to be transferred to CBY-Aden afterwards, contingent upon implementing the set of reforms requested by KSA. At the same time, the exchange rate appreciated in areas under Sana’a-based authorities by two percent compared to the beginning of 2023 and by ten percent year-on-year, reaching YER 544/USD by the end of Q1-2023.
Fuel imports: Fuel supply significantly improved from April 2022 onwards due to the regular flow of fuel vessels as stipulated in the provisions of the truce. Accordingly, the overall volume of fuel imports during Q1-2023 through Red Sea ports was nearly six times the level recorded for the same period last year, during which the country was facing severe fuel shortages.
Fuel prices: Local fuel prices remained at similar levels nationwide compared to the previous quarter, while being much lower than the level recorded during Q1-2022. Year-on-year, the average pumping prices of petrol and diesel2 decreased by around 20 percent in IRG-controlled areas, and by 23 percent in areas under Sana’a-based authorities. This decline is largely linked to the annual decrease in global crude oil prices and the improved fuel supply into the country, thanks to the truce.
Food imports: During Q1-2023, the total volume of food imports increased year-on-year by 33 percent through the southern ports of Aden and Mukalla and by 14 percent via the land ports of Shahen and Alwadeah, while it decreased by 13 percent via Red Sea ports. Overall, the net volume of food imported via all Yemeni ports was only three percent lower than the previous year. Overall, essential food items were available in the Yemeni markets during Q1-2023.
Humanitarian food assistance: WFP continued to target 13 million people each distribution cycle, however with a reduced ration due to critical shortages in funding. Based on the generous pledges from the donors in September 2022, WFP managed to increase the size of the dispatched food ration from 45 percent to 65 percent of the standard food basket during Q4-2022 and Q1-2023. Nonetheless, humanitarian funding for food assistance faces critical shortfalls for 2023.
Global food prices: In March 2023, the global FAO Food Price Index (FFPI) gradually decreased for the twelfth consecutive month, down by 21 percent from the all-time high level reached in March 2022. This decline is largely driven by resuming grain exports from Ukraine and increasing global food supply, as well as the marked decrease in the global prices of fertilizers. However, global food prices are still high, and concerns continue to prevail.
Minimum food basket: During Q1-2023, the monthly average cost of MFB slightly decreased by two percent from the previous quarter in both areas under the control of IRG and Sana’a-based authorities. Year-on-year, the MFB cost saw a higher decline in the northern governorates (down by 15 percent) compared to eight percent across those in the south. The alleviation in local inflation of food prices is largely attributed to the continued decline in global food prices and the marked decrease in local prices of fuel. However, local food prices remain unaffordable, and nearly 20 percent of the surveyed households in the south and 12 percent in the north indicated high food prices as a principal challenge hindering them from accessing an adequate diet during Q1-2023.
Food insecurity: At the end of Q1-2023, more than two in every five of the surveyed households in Yemen (46 percent) indicated lacking access to adequate food, with a higher proportion reported among households in IRG-controlled areas (52 percent) compared to those in areas under Sana’a-based authorities (44 percent). This nationwide trend was six percent lower than the previous quarter and eight percent lower than a year before. This decrease was largely driven by increased funding for assistance since September 2022, the decrease in global and local prices of fuel and food items, as well as the implications of truce on reducing incidents of violence. Nonetheless, food insecurity remains at alarming levels and Yemen is still one of the worst humanitarian crises in the world.