Remittances from labor migrants abroad continue to decline

• Although the average price for wheat flour across major markets is up by 22 percent compared to June 2014, prices have remained stable since April 2015, reflecting stability of the Tajikistani somoni (TJS) against the U.S. dollar (USD) and Kazakhstan tenge (KZT), stable prices for imported wheat grain from Kazakhstan, and domestic market supply from the start of the wheat harvest.

• The value of remittances from labor migrants abroad to households in Tajikistan continues to decline, although at a slower pace than during the first three months of 2015. The majority of households who depend on remittances as a source of income for market purchases of food are Stressed (IPC Phase 2) from now until at least December 2015.

• The wheat harvest is underway in Tajikistan. Initial indications are that production will be greater than last year.

The harvest for wheat and other grains has started in Tajikistan, and the Ministry of Agriculture reports that, as of July 1^st, more than 547,000 metric tons (MT) of grains have been harvested, a 12 percent increase from the same time last year. The increased production to date is likely due to increased cultivated area, as improved spring precipitation compared to last year helped farmers bring additional land under cultivation during the spring. A slight increase in yields was also reported. Nevertheless, the figures from the Ministry of Agriculture are preliminary, and final 2015 production totals will not be known until the conclusion of harvests in all areas of Tajikistan. Although reports indicated that some areas were attacked by locusts, timely government interventions have kept damages minimal.

Some torrential rains and above-average temperatures in July led to rapid snow and glacier melting, triggering floods and mudslides in several districts in the Gorno-Badakhshan Autonomous Oblast (GBAO), particularly in Shughnon, Vanj, Darvoz, and Rushon Districts, as well as in Rasht District of the Direct Rule Districts (DRD). The flooding and mudslides destroyed and damaged hundreds of houses and blocked road connectivity between Dushanbe and Khorugh. Most households displaced to safe locations, and the Government of Tajikistan pledged financial support to the displaced persons. There is continued risk of flooding and mudslides in GBAO and DRD districts during early August.

Torrential rains also affected the agriculture sector, and a reduction in cotton cultivation was reported. According to the Ministry of Agriculture as of June 1st, cotton was sown on 162,000 hectares (ha), representing a 10 percent decrease from last year and 90 percent of the targeted area. However, officials were optimistic about expected yields, and estimates indicate that total production will be similar to last year.

Wheat flour prices in Tajikistan closely followed wheat grain price trends for exports from Kazakhstan. Although prices have been stable since April 2015, they are 41 percent above the five-year average and are at the highest point since data became available in 2006. The current price stability reflects the stability of the Tajikistan somoni (TJS) against the U.S. dollar (USD) and Kazakhstan tenge (KZT) since May, continuous imports from Kazakhstan, and the arrival of domestic wheat harvests on local markets (Figure 2). Total wheat production is expected to be greater than last year, and wheat flour prices may decline after the harvest is concluded throughout the country. However, wheat flour prices in Tajikistan depend heavily on wheat production in Kazakhstan and the exchange rate of the Tajikistan somoni (TJS). In Kazakhstan, wheat production is expected to be lower than last year and the five-year average due to a contraction in sown areas. Thus, prices for imported wheat grain from Kazakhstan and for wheat flour within Tajikistan are not likely to decline drastically during the outlook period.

Prices for potatoes, another staple food, have been declining since early 2015, and are now 18 percent below the five-year average. An increase in cultivated area, as well as strong harvest prospects, are factors providing downward pressure on potato prices.

The value of remittances from migrant workers in the Russian Federation to households in Tajikistan has been continuously declining since last year. According to the National Bank of Tajikistan (NBT), nearly USD 1.162 billion was remitted during the first six months of 2015, 32 percent less than the amount of money remitted during the first six months of 2014. Similarly, Amonatbonk (Tajikistan Savings Bank) reported a 40 percent decline in the value of remittances in USD through its branches during the first six months of 2015 compared to the same time last year. Though some international financial institutions predict a 40 to 45 percent drop in the value of remittances as compared to last year, the NBT claims recovery in the level of remittances and forecasts a 27 percent decline. Households dependent on remittances as a major source income for market purchases of food will find it difficult to meet all basic food and non-food needs, and are Stressed (IPC Phase 2) from July until at least December 2015.