Yemen Key Message Update: Despite Import Support Measures, Significantly High Food Prices Set to Rise Further, May 2022 – Yemen

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Key messages

  • The wheat export ban announced by India on May 14 has heightened concerns over the stability of Yemen’s food supply due to the country’s heavy reliance on imports. However, India’s decision at the end of May to exclude Yemen of the ban will likely allow Yemeni importers to obtain the required quantities of wheat grains, although there is some uncertainty. Due to the limited storage capacity of the existing silos in the ports of Aden and Al Hudaydah, which does not exceed 20% of Yemen’s annual consumption needs, strategic stocks cannot be increased significantly, which which increases the vulnerability of the national food supply to other global supply and price shocks. .

  • From March to April 2022, the Yemeni rial (YER) appreciated by 23% and 7% in Aden and Sanaa, respectively, according to data from WFP. This is likely linked to the formation in early April of the Presidential Leadership Council and the announcement of a $3 billion financial aid package for the Gulf. However, Yemeni households and traders continue to lose faith in the short-lived YER appreciation, and traders are not lowering food prices commensurate with the currency’s recovery. Considering this and rise in world wheat prices in April, wheat flour prices fell only 6% in Aden and rose 11% in Sanaa city. Overall, prices of wheat grain, wheat flour, rice, sugar and oil fell by an average of 4% in Aden city and remained relatively stable in the city of Sanaa. More recently, as of May 29, key informants report that prices of subsidized bread have increased by 25% (from YER 30/bread to YER 40/bread) in Aden.

  • May 16, a deal between the Kingdom of Saudi Arabia (Saudi Arabia) and Yemen was signed to extend Saudi Arabia’s previous deposit and transfer the final batch of $174 million to the Central Bank of Yemen in Aden. Following this, the amount of currencies auctioned on May 24, 2022 was increased by 50 percentfrom 20 million to 30 million USD, likely to cover the increased needs in hard currencies for imports.

  • Staple food prices remain well above average and continue to rise overall. With limited income-earning opportunities and eroding coping capacity, food is becoming increasingly unaffordable for many poor households. Food access is expected to decline again following recent slight improvements during Ramadan and Eid in April and early May. Throughout the projection period to September, millions of the poor are likely to face food consumption deficits nationwide, with Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!) results should remain widespread. The populations of greatest concern are urban households with irregular sources of income and lowland households during the current agricultural season, given the heavy reliance on markets for food.

  • According to Yemen’s Food Security and Agriculture Group (FSAC), the value of emergency food aid cash transfers has increased as of May 1, 2022, to cope with the rising cost of the minimum food basket (MFB). Transfer values ​​have been increased to YER 65,000/household/month (equivalent to USD 109/household/month) in areas controlled by Sanaa-based authorities (SBA) and to YER 122,500/household/month (equivalent to USD 106/household/month) in internationally recognized government (IRG) controlled areas.[1] This will likely improve access to food for many beneficiaries given rising food prices. Meanwhile and based on feedback from humanitarian partners, the composition of the MFB in-kind and vouchers – which equates to around 80-85 percent of the kilocalorie needs of a seven-person household – has also been adjusted to replace 25 kg of wheat flour per 20 kg of wheat flour. rice, subject to beneficiary preferences.

[1] These values ​​are based on a household size of seven people and are adjusted for actual household size.

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