Potential spikes in wheat prices could increase food insecurity

• Record high September remittances of 421.8 million USD in September, high meat prices indicating high livestock prices, and steady casual labor wages are supporting food consumption and winter food stocking in Tajikistan.

• The wet season has had a slow start with most river basins receiving below average rains from October 1 to 20. Early wet season rains support land preparation and sowing for winter crops such as winter wheat and barley.

• Dramatic spikes in wheat and wheat flour export prices in Kazakhstan would lead to very high consumer prices in Tajikistan, limiting the ability of households to make market purchases and to purchase stocks for winter in the higher elevation areas.

Most indicators and proxy indicators of household income have remained relatively high or increased from August to September. Remittances totaled 421.8 million USD, the highest September on record and the 16^th monthly record.  Remittances have been supported by high levels of labor migration to Russia and Kazakhstan. As is seasonally typical, the number of returning labor migrants seasonally increased from August to September and remittances began their seasonal decline from August to September as more labor migrants returned to the country. Meat prices in September are much higher than last year and have grown at a much faster rate than grain or other food prices. As a proxy indicator for livestock prices, these indicate that incomes for pastoralists and agropastoralists may be increasing and that terms of trade for livestock to grain are likely higher than last year. Both skilled and unskilled casual labor wages have remained relatively steady for several months at the World Food Program’s five monitored markets, indicating steady wages. This indicator does not necessarily also provide a measure of the availability of casual labor or the ease of finding casual labor in rural areas.

While incomes may be steady, wheat and wheat flour prices have continued to increase. From August to September, first grade wheat flour prices increased in all five monitored markets. While the domestic wheat harvest was likely average due to good precipitation and growing conditions, the increase in export prices from Kazakhstan is being transmitted to Tajikistan. While Kazakhstan’s 2012 August and September wheat harvest was near average, it was far less than last year. Driving up the prices is competition for buying Kazakhstan’s exports. Russia is exporting less this year due to its reduced harvest. Also, Ukraine recently announced that it was going to ban wheat exports on November 15. Another branch of the Government of Ukraine denied this the following week, but wheat importers who depend on imports from the Black Sea exporter likely fear a repeat of the 2008 or 2010 wheat price spikes that followed export bans in the region. They may be increasing their purchases. A sudden, additional spike in export wheat prices in Kazakhstan would likely lead to a spike in consumer prices in Tajikistan, limiting the ability of the poor and the very poor to procure wheat and wheat flour both for consumption and for winter stocking in the higher elevation areas between now and December. Conditions during the January to March lean season would be worse if households were without stocks or had to forgo essential non-food expenditures in order to purchase a minimally adequate diet, possibly placing some poor households in Stressed (IPC Phase 2) during the lean season.

The 2012/13 agricultural season has gotten off to a slow start due to below average rains in early October (Figure 2). Other than in northern Sugd region in the Fergana Valley, rainfall totals were below normal from October 1 to 20. Early wet season rains support land preparation and sowing for winter crops such as winter wheat and barley. They also support any second crops that have yet to be harvested and the fruits and vegetables that are harvested later in the season.

Rasht Valley irrigated potato livelihood zone

This year, concerns about a late start of season due to below normal temperatures in the Rasht Valley were thought to have possibly damaged the potato harvest. However, from August to September, as the potato harvest started in most areas of Tajikistan, potato prices fell across the country. While prices in Gharm, the primary market town in the Rasht Valley, fell 18 percent from August to September, they remain above 2011 prices. Falling prices do not necessarily indicate a near normal harvest, but they probably do indicate that the potato harvest was not a total failure in the Rasht Valley.