Yemen Humanitarian Update Covering 18 - 27 September 2018 | Issue 28 [EN/AR]

Situation Report
Originally published


Key Issues
- Food and fuel prices have skyrocketed following a sharp depreciation of the Yemeni Rial against the US dollar. Crippling fuel queues are reported in Sana’a.
- Food security has further deteriorated, which could add another 3.5 million people to the 8.4 million people who currently need emergency food assistance in Yemen.
- The main Al Hudaydah-Sana’a road remains inaccessible due to fighting; access to the city is only from the north, on the Al Hudaydah-Hajjah road.
- Over 2.3 million people have been displaced by conflict since 2015; and an additional 58,000 households were displaced between June and August 2018.
- Efforts are underway to expedite the release of humanitarian cargo currently held at Yemen’s main entry points awaiting import approval.

Food and fuel prices spiral as currency plummets

The Yemeni Rial (YER) has plummeted to its lowest ever value, pushing the cost of basic food items beyond the reach of many people. Food and fuel prices have doubled in some parts of the country over the past two months when the Rial lost 30 per cent of its value. Between the first week of July and the third week of September, the exchange rate on the black market rose from 489YER to the US$ to 622YER.

The rapid depreciation in the Rial, the general security situation, the absence of price controls and trader practices will worsen the livelihoods and food security of Yemenis at famine risk given that almost all food consumed in Yemen is imported. According to FAO, the steep depreciation in the currency, as well as scarcity and the rise in the nominal price of fuel will push commodity prices up further (imported and locally produced) through inflated transport costs. A further escalation of the conflict in Al Hudaydah Governorate, through which most imports pass, will worsen the situation.

During the reporting period, the price of the three main commodities – sugar, wheat and flour – rose to record levels with the cost of sugar rising by more than 20 per cent, wheat prices up by 23 per cent and wheat flour up by 27 per cent. As a result, food security has worsened with humanitarian partners estimating that this will add 3.5 million people to the 8.4 million people who currently need emergency food assistance. Pockets of famine-like-conditions have already been reported in some areas. According to WFP, the economy has taken a nose dive and time is running out to prevent the country from slipping into a devastating famine.

Crippling fuel shortages have been reported. In Sana’a, extremely long queues have formed at gas stations that remain open, many are closed. The price of 20 litres of fuel has risen to 8,500YER, while on the black market the price is 20,000YER. In Al Hudaydah, black market prices have doubled to 600YER/1litre of petrol and 700 YER/1litre of diesel. Cooking gas too has increased to 7,000YER for a 20 litres cylinder, up from the official price of 3,000YER a cylinder. In Aden and Mukalla, fuel is in short supply. In Aden, electricity cuts have reportedly increased to 10-12 hours per day due to fuel shortages.

In an attempt to stabilize the currency, the Central Bank in Aden has raised interest rates on deposits to an all-time high of 27 per cent. The bank has also raised interest rates on government bonds by 5 per cent to 17 per cent and reduced the amount of cash that individuals can take out of the country with prior permission to US$10,000. Despite these measures, the Rial continued to depreciate.

UN Office for the Coordination of Humanitarian Affairs
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