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Sudan threatens to suspend Implementation Matrix with South Sudan

  • Food Security Outlook Update
  • Sudan
  • June 2013
Sudan threatens to suspend Implementation Matrix with South Sudan

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  • Key Messages
  • Current Situation
  • Updated Assumptions
  • Projected Outlook through September 2013
  • Key Messages
    • Suspension of the recent Implementation Matrix signed by Sudan and South Sudan is likely to negatively affect food security in both countries by eliminating oil revenues; increasing civil insecuriy along the border and in Abyei; and disturbing cross-border trade, grazing, and employment.

    • Medium-term forecasts suggest average to above-average rainfall in the surplus agricultural zones of the center and East, likely leading to an average harvest for 2013/14. However, average to below-average rainfall is expected in Darfur.

    • The most severe acute food insecurity (IPC 2.0 Phases 3 and 4) is in SPLM-N-controlled areas of South Kordofan/Abyei, in South Darfur, and in SPLM-N-controlled areas of Blue Nile. Food insecurity is likely to be most severe between now and the peak lean season (July - September). 


    Current Situation
    • Implementation matrix suspended. Due to allegations of South Sudanese support for armed rebels in Sudan, Sudan declared suspension of the recent Implementation Matrix and ordered the halt of export of South Sudanese oil via Sudanese facilities within 60 days. Other elements of the Implementation Matrix are also suspended, including: cross border trade and grazing, the right of citizenship, and the Abyei transitional administration. This is perceived as a major setback to Sudan/South Sudan relationship with serious implications to food security in both countries. Oil revenues constitute nearly 98 percent of national revenue in South Sudan. The services fees paid to Sudan for oil transit via pipeline had helped mitigate Sudan’s hard currency deficit, the fast devaluation of local currency, and the high rate of inflation. 
    • Continued fighting in South Kordofan displaced about 70,000 people in and around Abu Kurshola in April/May. The Humanitarian Aid Commission (HAC) reported that this extended fighting with widespread looting and asset destruction displaced about 63,000 people to areas controlled by the Government of Sudan (GoS) in North and South Kordofan and Khartoum. These IDPs are receiving assistance from communities, GoS, and humanitarian agencies. Some of these displaced have started to return. Informal sources estimated additional displacement of about 6,000 to SPLMN areas in Rashad and Um Dorain localities.
    • Staple food prices were stable or declined in most markets in May. This trend is in contrast to the increases which are normally expected at the beginning of lean season in May. This change in price behavior was mainly attributed to above-normal supply of sorghum due to high trader stocks after the favorable 2012/13 harvest and in anticipation of free 2013 trade with South Sudan, as well as the favorable rainfall forecasts and slightly early start of season in some areas (accelerating pre-rains destocking). Sorghum prices in Al Fasher have been unusually volatile over the past few months due to changes in in kind food assistance flows.

    Updated Assumptions

    FEWS NET assumes for its most-likely scenario that Sudan will formally implement its decision to suspend the Implementation Matrix with South Sudan by August 7, 2013. This will have the following consequences during the scenario period:

    • Sudan’s announcement increases security risks to oil in pipeline. Oil flows and related export and service fee revenues are likely to decline rapidly before reaching nil by mid-August.
    • The macro-economic impact of this change (deteriorating balance of payments, increasing inflation, etc.) will begin slowly in June due to reduced confidence in markets, even as revenues continue through part of August.
    • FEWS NET expects that the Abyei referendum, currently scheduled for October, will not take place this year.
    • Conflict will increase in border states in both countries. Civil insecurity will be most acute in Abyei and SPLM-Ncontrolled areas of South Kordofan, particularly beginning in September. The 57,000 returnees in Abyei, particularly north of Bahr Al-Arab/River Kiir, are likely to displace again to South Sudan.
    • Informal trade flows, which had increased in March and April, will fall again to levels of 2012 when Sudan imposed tough restrictions on cross-border trade with South Sudan.
    • The deficit in balance of payments will likely increase, which will also likely increase the gap between official and black market exchange rates beyond the current level of about 55 percent. This, in turn, will augment inflation beyond the 37 percent annual inflation rate reported in May 2013.

    In addition, FEWS NET assumes the following:

    • Sudan Meteorological Authorities (SMA) project average to above-average June to September rains in the main surplus production areas of central Sudan (Kassla, Gadaref, Gazeira, White Nile, Sinnar and Blue Nile states) and normal rains in Northern, River Nile, Red Sea, South Kordofan, and North Kordofan states. Given the share of national production generated by these states, national production in 2013/14 is likely to be average to good for the second consecutive year. This is consistent with FEWS NET’s April Outlook report.
    • In contrast to FEWS NET’s April Outlook, SMA forecasts average to below-average rains in Darfur.  

    Projected Outlook through September 2013

    June to September is the peak lean season in Sudan. Nevertheless, the majority of poor households in areas without major conflict, including some parts of Darfur and most of North Kordofan states, are likely to maintain adequate access to food via market purchase funded by income from sale of livestock, cash crops, normal loan practices, and seasonal agricultural labor. The June-to-September rains are also expected to start and continue at average to above-average levels. Belowaverage cereal exports to South Sudan may keep supply in Sudan higher than usual. Major price spikes are unlikely despite faster-than-usual seasonal price increases beginning in June due to Ramadan (fasting month) in July-August and the likely macroeconomic downturn. Thus, the majority of households in most parts of Sudan will continue to have Minimal (IPC Phase 1) acute food insecurity through the Outlook period.

    Border states, particularly South Darfur and South Kordofan

    The below average rains expected in Darfur are likely to contribute to below-average income from seasonal agricultural labor by the poor households of resident communities and IDPs, to below-average income from the sale of cash crops, and to below-average food sourced from own production in 2013/14. In the conflict-affected areas of South Kordofan, Blue Nile, Darfur, and Abyei, Stressed and Crisis (IPC Phases 2 and 3) acute food insecurity will persist through September due to poor market access and asset losses. In SPLM-N controlled areas of South Kordfoan, where asset losses and poor market access are relatively more acute and where assistance is assumed nearly nonexistent, food security conditions likely to deteriorate to Emergency (IPC Phase 4) levels through the peak of the lean season in August/September.

    Figures Seasonal Calendar for a Typical Year

    Figure 1

    Seasonal Calendar for a Typical Year

    Source: FEWS NET

    This Food Security Outlook Update provides an analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography over the next six months. Learn more here.

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