Remote Monitoring Report

Low access to food will be exacerbated as the lean season begins

April 2022

April - May 2022

June - September 2022

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Would likely be at least one phase worse without current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.

IPC v3.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC v3.0 Acute Food Insecurity Phase

Presence countries:
1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Remote monitoring
countries:
1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

Key Messages

  • In general, urban areas are expected to remain in Minimal (IPC Phase 1), despite current inflation. The poorest households, especially in rural areas of the region, will continue to experience Stressed outcomes (IPC Phase 2) as they have depleted their food stocks and are depending on market purchases at a time when the prices of food and other basic services are very high. As the lean season progresses, these households will experience a seasonal deterioration in food conditions, and it is expected that the proportion of households in Crisis (IPC Phase 3) will increase, especially in Nicaragua. Due to previous shocks, Crisis conditions (IPC Phase 3) are expected in the Dry Corridor and eastern Honduras until the primera harvest starts in September. 

  • The annual inflation rate continues to increase throughout the region, especially in Nicaragua, largely driven by rising food costs. Some of the largest increases have been reported for wheat derivatives, vegetable oils and fats, and staple grains. Given the influence of the international market and local dynamics on these products, it is expected that their prices will remain high throughout the outlook period, despite the measures taken by governments to limit the economic impact. This will play a predominant role in the food situation of households in the region, by reducing purchasing capacity in the season when households, especially rural ones, have fewer income-generation options. 

  • The primera planting will take place until May and early June in most of the region, with forecasts of close-to-average accumulated rainfall. Due to the high price of fertilizers, lower production is expected, mainly because the staple grain production area will be reduced during the primera season. 

ZONE CURRENT ANOMALIEs PROJECTED ANOMALIES
REGIONAL
  • In March, wholesale white maize prices increased 16.6 and 11.4 percent compared to the previous month for the markets of San Salvador and Tegucigalpa respectively, while remaining stable in Managua. However, compared with last year, price increases for this grain were even higher, rising 62.8, 52.4 and 72.9 percent in the three markets, respectively. Red bean prices were fairly stable compared to February 2022, thanks to an average apante/postrera tardía harvest that increased the supply of this grain in the regional market. However, compared to last year, red bean prices have risen significantly in Honduras and Nicaragua, with increases of 35.4 percent and 21.4 percent, respectively.
  • Annual inflation continues to increase, with a year-on-year rise in March of 6.7, 7.0, and 8.7 percent for El Salvador, Honduras, and Nicaragua, respectively. Compared to March 2021, the sector with the highest level of inflation is food, rising 9.8 percent in El Salvador, 3.3 percent in Honduras and 13.7 percent in Nicaragua.
  • In March, thanks to the government measures taken throughout the month in the three countries, the price of diesel stabilized in Honduras and saw slight increases of 6.3 and 5.6 percent in El Salvador and Nicaragua, respectively, compared to February. However, these prices are still above those of March 2021, by 26.3 percent, 41.7 percent, and 35.1 percent, respectively.
  • Prices of the various fertilizer compounds stabilized in March, although year-on-year increases continue to be reported in Honduras and Nicaragua, with rises of 49.7 and 133.4 percent, respectively.
  • Although as at April 15, rainfall deficits were reported in Honduras — with the exception of the south — and central Nicaragua, and excess rainfall was reported in El Salvador and the Nicaraguan Atlantic coast, there has been no impact on the primera plantings, which will begin in May.
  • Continuing last year's trend, remittances are expected to remain above average. However, since they are not recipients, the poorest households will only benefit indirectly from the labor that remittances could bring to the construction, trade, and domestic services sectors.
  • Thanks to the subsidies and price controls introduced by the governments of El Salvador and Honduras, prices are expected to stabilize, at least until May, although they will remain high compared to last year and the five-year average. In line with the recent trend, the Nicaraguan government’s intervention will be more limited, so the high prices will have a greater impact in this country than in the other two. Local economic factors, coupled with the increase in international prices of wheat and its derivatives, and of vegetable oils, will keep overall inflation high compared to last year.
  • Due to the agricultural losses reported in 2021 and international trends in yellow maize — a grain that the food industry can substitute for the white variety — white maize prices are projected to remain high compared to the average in the three countries during the outlook period.
  • Similarly, red bean prices will remain above average throughout the outlook period, despite a near-average apante/postrera tardía cycle.
  • Near-average accumulated rainfall is forecast until September, despite ongoing La Niña conditions. In addition, various forecasts indicate an above-average hurricane season for the Atlantic.
  • Since fertilizer prices are still high compared to those reported last year, it is expected that producers (especially large and medium-sized producers) will continue to cultivate smaller areas of land than usual, and that higher production costs will result in reduced hiring of agricultural laborers.
  • Given the ongoing political situation in Nicaragua, the existing forecasts of a slump in national and international investments are maintained.

 

PROJECTED REGIONAL OUTLOOK THROUGH SEPTEMBER 2022

The year-on-year rises in general inflation reported in March (Figure 1) were 6.7, 7.0 and 8.7 percent for El Salvador, Honduras, and Nicaragua, respectively. These rises are largely driven by high food prices, with inflation in the food sector at 9.8 percent in El Salvador, 3.3 percent in Honduras, and 13.7 percent in Nicaragua. Food products with the biggest price increases included vegetable oils and fats, cheese, bread, and staple grains. For example, in March, the price of white maize in the San Salvador market increased by up to 16.3 percent compared to the previous month. Red bean prices remained stable in March thanks to the flow of freshly harvested grain to the market, but they continue to reach levels up to 46.5 percent above the five-year average. 

This high inflation, reported in the region since about mid-2021, is negatively and progressively impacting household economies, both in urban areas since households depend exclusively on food purchases, as well as in rural areas since these areas experience food shortages during the annual lean season which begins in April, making these households dependent on food purchases as their main source of food. In some areas of Honduras and Nicaragua that were affected by irregular rainfall in 2021, this lean season started earlier than usual, in March. 

A combination of factors has produced price rises, including the agricultural losses suffered in 2021 due to irregular rainfall, the high fuel prices that are raising transport costs, and rising fertilizer prices at the end of 2021, which increased production costs during the postrera and apante seasons. Market speculation has also contributed to these price rises, driven by the considerable uncertainty in the world economy and trade, itself a result of the COVID-19 measures imposed in 2020 and, since February 2022, of the crisis in Ukraine. 

Governments have taken various actions to limit inflation and the impact on the household economy. For example, in March 2022, the government of El Salvador cut fuel taxes to try to reduce the cost to the consumer. It then introduced fuel subsidies and froze fuel prices at the beginning of April, as well as applying subsidies to propane and price controls to public transport fares. In Honduras, the government decreed a price cut, of 10 lempiras, for fuels in general in February. Moreover, it introduced a 50 percent subsidy for propane (beginning in February) and for diesel (beginning in mid-March), and will gradually release strategic reserves of maize and beans in an attempt to curb speculation and increase supply to the market. The Nicaraguan government was the last to introduce measures to support the economy, and has done so to a lesser extent than its counterparts. Having already subsidized public transport, it then also froze fuel prices on March 20, 2022. It is, however, the country with the highest inflation in the region. Although all these government measures across the region did lead to a slowdown in price increases in April, prices remain atypically high.

This high-price scenario, coupled with high debt — a product of consecutive shocks in recent years — not only restricts access to food, but also affects the resilience and response capacity of poorer households. It is likely that debt declined as income was generated during the season of peak demand for labor, which ended in February. However, paying these debts, and the persistence of atypical debts, reduce the cash available and the purchasing capacity of poor households during the lean season, especially considering that employment options decline seasonally in rural areas. 

Limited access to food is also seen in urban areas, where employment rates, particularly in the informal sector, have not returned to pre-pandemic levels in the three countries. Data from the Salvadoran Social Security Institute show a decrease in the number of workers paying contributions to the institute in January 2022 compared to the previous month, although there was a slight increase compared to January 2021 and January 2020. However, the construction sector shows negative trends for all periods analyzed, while the domestic services sector, although recovering, remains below pre-pandemic levels. For Nicaragua, the Continuing Household Survey shows a moderate improvement in the unemployment rate during the fourth quarter of 2021, compared to the same period in 2020, but remaining below levels reported prior to the political crisis in 2018. For Honduras, although there are no updated employment-related data, the monthly index of economic activity showed in January 2022 a decline from December 2021 and a year-on-year fall of 8.2 percent. This may indicate that although employment has recovered to some extent from the effects of the pandemic, growth is not yet constant. 

The rainy season has not yet begun in the region, despite some precipitation in El Salvador. Farmers are therefore waiting for more regular rains to start the primera planting cycle. This year, despite forecasts of close-to-average rainfall, producers (especially medium- and large-scale producers) are likely to reduce the cropped area in this cycle, due to the high cost of agricultural inputs. For example, March 2022 saw a year-on-year increase in fertilizer prices of 133.4 percent. It is expected that high prices will continue to be reported during the outlook period. Some subsistence producers will receive agricultural packages, which often include fertilizers, from governments. However, this group does not represent the majority that will reduce or even eliminate the use of fertilizer before further reducing their planting areas. 

Given the factors described above, Crisis (IPC Phase 3) outcomes are expected to persist until the primera harvest, which takes place in August/September, in areas affected by drought in 2021 in central and southern Honduras. In the rest of the region, urban areas will mostly be in Minimal (IPC Phase 1), but households whose livelihoods depend on informal employment will face Stressed (IPC Phase 2) or, in the worst cases, even Crisis (IPC Phase 3) outcomes. Rural households have experienced economic decline and damage to livelihoods due to a series of heterogeneous, consecutive shocks in previous years. This situation, coupled with the forecasted persistent inflationary dynamics, will lead to Stressed (IPC Phase 2) outcomes, which will worsen until around mid-August, before improving with the harvest of staple grains from the primera cycle. This harvest will allow rural producer households to restock their food reserves, and non-producers to benefit from increased market supply and the consequent fall in prices, which will partially reduce the pressure on their budgets. 

It is expected that the poorest households, both urban and rural, will have to resort to more extreme coping strategies, such as replacing typical foods with less-favored or lower-quality food and, eventually, reducing the amount and variety of food they consume, in addition to reducing non-food essential expenditure. In households in Crisis (IPC Phase 3), consumption-based coping strategies are expected to intensify, with households reducing the number of meals per day, especially for adults, for the benefit of children — even when borrowing money or receiving food support from third parties — , as well as selling productive assets to maintain minimum consumption. 

Events that Might Change the Outlook

Table 1. Possible events over the next eight months that could change the most likely scenario 

AREA Event Impact on food security outcomes
Regional  Above- or below-average rainfall An anomaly in the timing and location of rains could cause crop damage and/or agricultural losses, especially of staple rainfed grains. The impact would depend on their location and magnitude; they could reduce the availability of food for affected households and even affect domestic production, which would have an impact on market prices. This event could increase the population facing Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes.
Regional  Additional increases in fuel, food, and transportation prices A significant increase in the price of fuels and some grains in the international market, as well as the cost of land and sea transportation, as a result of the war in Ukraine and difficulties in international trade, could cause additional increases in the price of food, fertilizers, and raw materials, further reducing access to food for the poorest households, hindering economic recovery, and increasing the population facing Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes.
Regional  Hurricanes  The direct or indirect influence of a tropical event could change agricultural production prospects and other sources of income, which in turn could reduce food access and availability; this would depend on the hurricane's trajectory and magnitude. Loss of crops and other livelihoods could increase the population facing Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes.
Regional  Introduction of subsidies or other measures to facilitate access to fertilizers Such subsidies or measures would reduce economic pressure on producers and allow them to access fertilizers, thus supporting the production of staple grains and other commercial crops, itself a source of employment. 

 

 

 

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In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

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The Famine Early Warning Systems Network is a leading provider of early warning and analysis on food insecurity. Created by USAID in 1985 to help decision-makers plan for humanitarian crises, FEWS NET provides evidence-based analysis on approximately 30 countries. Implementing team members include NASA, NOAA, USDA, USGS, and CHC-UCSB, along with Chemonics International Inc. and Kimetrica.
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