Macroeconomic deterioration continues amidst ongoing social unrest and change of government

• In April, Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes persist in many areas of Sudan. Food security is expected to continue to deteriorate to Crisis (IPC Phase 3) in Darfur, Blue Nile, Kordofan, Kassala, and much of Red Sea states through September due in large part to persistent macroeconomic difficulties. Emergency (IPC Phase 4) is likely among IDPs in SPLM-N controlled areas of South Kordofan and in Jebel Mara of Darfur at the August/September peak of the lean season.

• In early April, the Sudanese military led the overthrow of President Omar al-Bashir. There are ongoing discussions for the formation of a joint civilian-military council, though protests for immediate transition to a civilian-led government continue. These political events have resulted in a general environment of uncertainty.

• Macroeconomic challenges are expected to continue during the outlook period and staple food prices will likely remain at least 250–300 percent above average. Livestock and labor prices, although increasing, are unlikely to keep pace with staple food price increases and poor households’ purchasing power will remain below average.

• The 2018/19 main season harvest extended through April in some areas, coinciding with the ongoing winter wheat season. Land preparation for the 2019/20 season has not yet started in most of the semi-mechanized and irrigated sectors as a result of the delayed 2018/19 harvesting and fuel and cash shortages. Land preparation is likely to start later than normal and access to labor opportunities will likely remain below normal in May.

In early April, following civic protests, the Sudanese military led the overthrow of President Omar al-Bashir. There are ongoing discussions for the formation of a joint civilian-military council, though protests persist as civilians demand an immediate transition to a civilian-led government. These political events have resulted in an environment of uncertainty and the impact on macroeconomic conditions remains unclear. Despite slight appreciation in early April, the exchange rate of Sudanese Pound (SDG) against the USD is now experiencing extreme volatility, appreciating and depreciating by large amounts over the course of a few days. This is attributed to a combination of factors including the loss of key USD traders, news of financial assistance from Gulf countries, and the decision of the TMC to freeze the accounts of government companies. The Central Bank of Sudan has set the official exchange rate at 45 SDG/USD, down from 47.5 SDG/USD. The shortage of hard currency persists, negatively impacting normal imports of essential commodities including wheat and wheat flour. Cash and fuel shortages also continue unabated.

The 2018/19 main season harvest extended through April in some areas, coinciding with the ongoing winter wheat season. Despite the availability of staple foods from the harvest, local cereal prices continued to increase in most markets between March and April, by 10-15 percent, a time when prices are usually stable or seasonally decreasing. The ongoing increases are driven by depreciation of the local currency and poor harvests in some areas. Staple food prices are 85-150 percent above last year’s prices and 250 percent above the five-year average. Livestock prices either remained stable or slightly increased in most markets between March and April and are on average 120 percent above last year and over 200 percent above the five-year average. Although livestock prices are increasing, they are not keeping pace with staple food price increases and terms of trade (ToT) remain below average (Figure 1). Furthermore, livestock sales among poor households remain limited due to low livestock ownership.  

Land preparation, which typically starts in April, has not yet started for the 2019/20 season in most semi-mechanized and irrigated sectors due to the delayed harvesting of 2018/19 crops and persistent fuel and cash shortage. Labor wages have decreased with the beginning of the lean season, the labor wage-to-sorghum ToT across key markets are 15-20 percent lower than the five-year average.

April 2019 is typically the end of the post-harvest period and beginning of the lean season. With the slight delay in harvesting of crops, and harvesting of winter wheat, poor households still have access to crops and overall food security outcomes in April remain similar to that of February and March. Poor households also have access to some in-kind payments from agricultural labor and are purchasing food from markets. However, overall access to food is much lower than is typical during this time period as the macroeconomic crisis is driving high prices and poor terms of trade. Many areas are Stressed (IPC Phase 2), while pats of Jebel Marra and South Kordofan, southern Blue Nile, parts of North Kordofan and West Kordofan, and the northern part of North Darfur, northern Kassala, and much of northern Red Sea states are in Crisis (IPC Phase 3). 

The assumptions used to develop FEWS NET’s most likely scenario for the Sudan Food Security Outlook for February to September 2019 remain unchanged except the following:

• Ongoing social unrest is likely to continue at least in the near term. Although the macroeconomic impacts are still unclear, macroeconomic challenges are likely to continue during the projection period. The possibility of assistance from Gulf countries and increased government savings would likely lead to macroeconomic improvements.
• Based on revisions to FEWS NET’s integrated price projections, the retail prices of sorghum and millet are anticipated to be slightly higher than previously anticipated. Overall, prices will likely be around 250-300 percent above the five-year average. Livestock prices are now anticipated to remain 80-120 percent above last year and 200-250 percent above the five-year average.
• Land preparation for the 2019/20 season will start later than normal and this will result in lower access to labor opportunities in May.

Food insecurity is anticipated to be more severe than normal throughout the reporting period driven by the continued poor macroeconomic conditions. In addition, the recent government changes and overall instability and social unrest is expected to continue driving high market prices and limiting labor opportunities. Given that prices of food items are expected to continue to increase, poor households will likely face increased difficulty purchasing sufficient food to meet minimal food requirements, resulting in lower than normal food access. Many areas in North Darfur, parts of Jebel Marra and South Kordofan, southern Blue Nile, parts of North Kordofan and West Kordofan, northern Kassala, and much of northern Red Sea states will be in Crisis (IPC Phase 3).

Food insecurity will further deteriorate during the August to September peak of the lean season when access to food and income is typically at its lowest level, households’ food stock from own production are exhausted, and cereal prices are at their highest levels. Given the ongoing social unrest and deteriorating macroeconomic situation, the number of households facing Crisis (IPC phase 3) or worse will be atypically high. IDPs in SPLM-N controlled areas of South Kordofan and Jebel Mara are expected to be in Emergency (IPC Phase 4), while the Crisis (IPC Phase 3) will persist in all other previously-mentioned areas of concern.