Yemen Market Watch Report, Issue No. 28, September 2018

Report
from World Food Programme
Published on 30 Sep 2018 View Original

Highlights

  • The Yemeni Riyal further weakened in September 2018, and continued to go down sharply in the first two weeks of October 2018, losing over 200% of its precrisis purchasing power.

  • In-country food stocks are estimated at 1.244 million MT as of October 2018. Wheat stock may cover the national requirement for about two and half months, rice for one and half months while vegetable oil may last only for two weeks. Fuel commodities (petrol and diesel) continued to be scarcely available. Al Hudaydah suffers the most from scarcity of commodities in the markets due to the intensification of fighting.

  • Retail prices of food commodities increased by 9%-17% in September 2018 compared with those in August, and 65%-136% higher than in pre-crisis period. National average fuel prices rose by about 23-41% from August 2018; and 101-232% higher in September 2018 than those recorded in the pre-crisis period.

  • The average cost of the monthly minimum food basket in September 2018 rose by 15% from August, and 110% higher than in pre-crisis time.

  • The Alert for Price Spikes (ALPS) indicators for all basic food items and the cost of food basket remained at their crisis levels in September 2018.

Macroeconomic situation

The multi-faceted impacts of the ongoing prolonged war in Yemen caused unprecedented humanitarian crisis in the country, labelled as the worst human-made disaster in the modern history of the world. The macroeconomic situation has severely deteriorated partly due to plummeted national revenue from exports and other sources of the GDP. Consequently, most of the basic social services have been collapsed and the well-being of millions of Yemenis have been seriously compromised.

The currency crisis driven by the rapid depreciation of Yemen Riyal further complicated the dire humanitarian situation in the country. The national average exchange rate in September was about 630YER/USD, while it had reached to 720YER/USD during the last week of the month (Chart 1). It further dropped sharply to 800YER/USD in the first week of October 2018, and stabilized at about 730YER/USD during the second week of October. The exchange rate recorded in the last week of September was 70% lower than last year and the Yemeni Riyal purchasing power gone down by 235% from the pre-crisis time.

During the month of reporting, governorates such as Ibb, Al Mahweet, Sana’a City, Abyan, Ad Dale, and Hajja have had worse exchange rates than the national average (Chart 1). Weekly trends are presented in Annex 2 covering the period between the first week of October 2017 to second week of October 2018.