High staple food and fuel prices to drive increased assistance needs, lower crop production

• Sharp increases in staple food prices are likely to exacerbate the severity of food insecurity among populations affected by severe dryness and/or displacement in 2017. Between June and September 2018, IDPs in SPLM-N controlled areas of South Kordofan are likely to be in Emergency (IPC Phase 4), while poor households in North Darfur and Kassala states and IDPs in Jebel Marra will be in Crisis (IPC Phase 3). Across Sudan, assistance needs among poor households are likely to be higher than normal due to very high staple food prices.

• Staple food prices are expected to remain very high through January 2019, even though harvests starting in October 2018 could lead to small declines. Food security outcomes are expected to improve starting in October, following seasonal improvements in livestock productivity and as households access own-produced foods and earn in-kind income from agricultural labor. However, the number of people requiring emergency food assistance is likely to remain at above normal levels during the harvest period.

• Persistent long-term difficulties accessing foreign exchange in Sudan has resulted in severe fuel shortages and sharp increases in fuel prices between March and May 2018. Despite recent improved fuel availability in Khartoum, persistent fuel shortages during the planting season and sharp price increases for agricultural inputs are likely to reduce planted area and yields during the 2018 agricultural season to below-average levels, despite forecasts for above-average main season rainfall across many areas of Sudan.

Current Situation

Seasonal performance

Performance of main season (June to September) rainfall has begun favorably over most areas of Sudan, with remote sensing products indicating early rainfall in May, and field reports suggesting an earlier than normal start of season. In some parts of southern Gadarif and Blue Nile states, the amount of rainfall received over the course of May 2018 is sufficient for planting, which is one month earlier than normal. Field reports also indicate that above-average levels of vegetation have been observed in Northern Kordofan, the Bottana, region and scattered pastoral and agropastoral areas in the center of the country.

Overall, cumulative rainfall to date according to RFE 2.0 ranges between 25 to 75 mm over parts of southern, eastern, and western Sudan (Figure 1), which is near or above average, depending on the area. The Sudan Meteorological Authority (SMA) reported by the end of May 2018 that southern parts of the country received above normal to normal rainfall, while near-normal rainfall has been recorded elsewhere. Rainfall declined during the first 10 days of June, before increases were observed in mid-June. Additional monitoring is needed to evaluate the seasonal progress and its impact on agricultural and pastoral activities. 

Macroeconomy

Since late 2017, the Government of Sudan has begun to implement significant changes to economic policy in response to persistent, long-term difficulties accessing foreign exchange and government funds with which to support food and fuel imports and subsidies. These changes include the removal of subsidies for wheat and wheat flour imports, devaluation of the Sudanese Pound (SDG), and reductions in direct purchases of key commodities from abroad. The Government of Sudan devalued the Sudanese Pound (SDG) from 6.7 SDG/USD to 30 SDG/USD and subsidies of wheat and wheat flour were lifted in February 2018.

Given the government’s inability to continue these purchases at typical levels and to maintain subsidies for the sale of these commodities on domestic markets, extreme fuel shortages have been reported all over the country since late March 2018. In areas such as North Kordofan, North Darfur, and Gadarif, field reports suggest fuel shortages have driven shortages of water pumped from boreholes for livestock consumption and irrigation of off-season crops. WFP reports that fuel shortages have disrupted the delivery of humanitarian assistance, with only 36 percent of the planned in-kind food assistance to Darfur in April 2018 distributed due to fuel shortages. Fuel availability has improved since late May 2018, largely due to reported increases in fuel imports, but diesel remains in short supply at fuel stations. As a result of the fuel shortage, transportation costs have increased by 60-70 percent and are expected to limit the quantity, and increase the cost, of cultivation during the current agricultural season — particularly in the semi-mechanized sector. In turn, this will lead to reductions in area planted, and fertilization use, leading to a combination of reductions in area planted and yields. According to Sudan’s Central Bureau of Statistics (CBS), inflation in Sudan increased from 55.6 percent in March 2018 to 57.65 percent in April 2018. The bulk of this increase is derived from the increased prices of foods and drinks, but also due to the increased cost of transportation. Between April 2017 and April 2018, inflation increased from approximately 34.8 percent to 57.6 percent.

Sorghum retail prices between April and May have increased by ten to fifteen percent in Khartoum, Port Sudan, and Kassala markets. The highest price increase of 38 percent during this period was reported in Gadarif (a main production area) followed by El Obied, Ad-Dain, and Madani with increases between 23 and 28 percent. Millet retail prices also have increased by five to 20 percent across most markets between April and May, with the highest increase (35 percent) reported in Port Sudan in Red Sea state. The high increase in sorghum and millet prices was mainly attributed to the significant increases in transportation costs, which coincided with seasonal increases in demand for local consumption. Current levels of sorghum and millet prices were on average 138 and 172 percent, respectively, above their May 2017 levels, and 220 and 225 percent above the recent five-year average. Prices of locally produced wheat continued earlier than usual seasonal increases between April and May, following the recently concluded harvest in March and April 2018. Wheat prices increased five to ten percent across most markets. These increases in locally produced wheat prices were attributed to the extremely high production and transportation costs this year and associated with sharp increases in prices of imported wheat and wheat flour following the removal of subsidies in February. May 2018 levels of locally produced wheat prices were on average 120 percent above the price in May 2017 and over 200 percent above the reCereal pricescent five-year average.

Livestock prices

Livestock prices slightly increased in most markets between April and May 2018 due to the seasonal increase in demand for local consumption during the wholly month of Ramadan as well as for export to Saudi Arabia. Sheep and goat prices increased by five to 10 percent in most markets and remained stable in few markets. Current average livestock prices were about 55 percent above last year and over 120 percent above the recent five-year average.

Labor prices

Labor wages continued the typical stable trend during the post-harvest period in most markets monitored by FEWS NET. Labor wages remained relatively stable in most markets between May 2018 and April 2018 due to seasonally low demand during the post-harvest period. Current levels of labor wages were similar to the same period last year. Daily labor wages are likely to begin typical seasonal upward trend during the scenario period (the main agricultural season) that extends from June 2018 to January 2019 due to high demand for agricultural labor for weeding and harvesting.

Terms-of-trade and household purchasing power

In May 2018, sorghum to livestock terms-of-trade (TOT) continued to be in favor of sorghum producers/traders in most markets monitored by FEWS NET due to the sharp increase in staple food prices induced by the macro economic challenges and the high transportation cost, in addition to high seasonal demand associated with the start of the typical lean season in June 2018. Goat to sorghum terms-of-trade in May 2018 were 40 to 70 percent lower than of same period last year and the five-year average. Similar trends in terms of trade were observed for other sources of income, including the labor to cereals terms of trade. The declining trend of sorghum TOT is mainly due to the sharp increase in sorghum prices induced by macro-economic changes and increased transport costs. The deteriorating TOT is reducing the ability of poorer households to access food through market purchase, as their main income sources are not keeping pace with the increase of staple prices.

Conflict and South Sudanese refugees

The influx of South Sudanese refugees into bordering states of Sudan continues due to ongoing conflict and food insecurity in South Sudan. According to UNHCR, since December 2013, more than 765,000 refugees from South Sudan have arrived in Sudan, of whom 19,207 arrived in 2018 so far. About 1,522 South Sudanese refugees arrived in May 2018, most of whom arrived in East Darfur, West Kordofan, White Nile, and South Darfur states.

The declaration of the unilateral ceasefires by the Government of Sudan and main armed rebel groups in Darfur, South Kordofan and Blue Nile states since last year has resulted in improvements to the security situation in these areas due to reduced fighting. Subsequently, the influx of conflict-displaced people during the first half of 2018 declined significantly compared to recent years of active conflict in these areas. According to a recent update from the Government of Sudan, the number of IDPs across Sudan has reduced from 2.3 million last year to about 1.9 million in May 2018, most of whom are protracted IDPs in Darfur. The relative stable security situation encouraged the return of some IDPs to their home villages in Darfur. The government reported the return of about 386,000 people in Sudan since last year, mainly in Darfur. Government officials in East Darfur state reported 5,382 households, 1,291 households and 331 households have returned to Yassin, Shiariya and Asalaya localities since the beginning of this year respectively. The IDPs returned from Kalma and Otash camps in South Darfur State as well as Zam Zam camp in North Darfur State. A lack of basic services and infrastructure in addition to insecurity in some areas continues to prevent the return of displaced people to their areas of origin. Field observations indicated the relatively reduced fighting between Sudan Armed Forces (SAF) and Sudan People Liberation Movement North – Abdel Aziz al-Hilu (SPLMN-AH) faction in South Kordofan state over the past year has encouraged IDPs to return for cultivation in government-controlled areas of South Kordofan state. Similar patterns of return are reported in government-controlled areas of Blue Nile state.

Skirmishes between SAF and Sudan Liberation Army – Abdel Wahid faction (SLA-AW) in pockets of Jebel Marra since February 2018 and the tribal conflict between nomads and sedentary farming communities in Western Jebel Marra displaced about 11,500 people to Rokero town and nearby Jemeza villages. In addition, 8,900 people have been displaced in parts of East and South Jebel Marra in South Darfur in April and May 2018. So far, the IOM registered and verified 2,279 new IDPs from East Jebel Marra in Marshang locality in South Darfur. Marshang IDPs were from Rabkona, Suwannee and Feina villages in East Jebel Marra. Humanitarian agencies reported the arrival of 3,645 new IDPs from East Jebel Marra in Otash camp near Nyala town, the capital of South Darfur. Meanwhile, an unknown number of people reportedly went to hide in mountainous areas. It is also reported that fierce clashes between SAF and SLM-AW occurred in Glolo area in western Jebel Marra in Central Darfur State during the second week of June 2018, forcing thousands of civilians to flee their home villages. However, the onset of heavy rains forced the parties to stop the fighting. The rainy season will likely reduce the mobility of troops and military equipment and thus reduce the level of skirmishes in Jebel Marra.

Humanitarian assistance

In April 2018, WFP distributed 11,038 MT of assorted food commodities to 1.7 million beneficiaries in Sudan. WFP also made 184,770 USD in cash-based transfers in April 2018. The beneficiaries in April 2018 composed of 65 percent IDPs, 23 percent South Sudanese refugees, 11 percent residents in drought and conflict affected areas of Sudan and one percent of returnees. In North Darfur state which was among the areas most affected by poor performance of the rainy season last year, WFP assisted 97,000 drought-affected people in eight localities with in-kind food assistance of a half ration (the full ration is 2100 kcal per person per day). The arrival of 63,000 MT of USAID donated assorted food commodities food in June 2018, pushed the shortfall gap till August for cereal, pulses and oil.

The Strategic Reserve Corporation (SRC) of Sudan government distributed 317,085 MT of sorghum to government employees all over Sudan on a loan basis at SDG 325 per sack on average, which is about 60 percent of the average market price of sorghum in Sudan. About 43 percent of this amount was delivered in February 2018 and 57 percent delivered in May 2018. In addition, the SRC intervened in markets of drought affected areas since the beginning of year 2018 and sold about 52,560 MT of sorghum at SDG 450 – 500 per sack directly to consumers in markets of these areas. The SRC prices is relatively half the market prices. The states where SRC intervened in market supply of sorghum include North Darfur, Kassala, Red Sea, West Darfur and Central Darfur states.

Nutrition

World Vision International (WVI) carried out a targeted Mid-Upper Arm Circumference (MUAC) screening among new arrivals from East Jebel Marra in Marshang locality in May 2018. A total number of 156 children under five years of age were screened for malnutrition, out of whom nine (5 percent) children with severe acute malnutrition (SAM) and 17 (10 percent) children with moderate acute malnutrition (MAM) were identified and referred for treatment.

Assumptions

The most likely food security scenario for June 2018 through January 2019 is based on the following assumptions:

June to September rainfall

• Cumulative rainfall during the June to September 2018 rainy season in Sudan is expected to be above average tending to be average, based on international seasonal forecasts, and planting is expected to occur on time.
• Continuing fuel shortages and macro-economic challenges facing the country are likely to result in reduced area planted for 2018/19’s agricultural season. FEWS NET assumes area planted in the 2018/19 agricultural season will be 20-30 percent lower than the recent five-year average. Area planted in the semi-mechanized sector is expected to be lower by 30-35 percent, while area planted in the irrigated and traditional sectors will likely be reduced by 20-25 percent and 15-20 percent compared to the recent five-year average, respectively.
• Despite the projected favorable weather conditions, reduced area planted and yields due to high cost of inputs will likely result in 2018/19 agricultural production 20-30 below the recent five-year average. 
• Favorable performance of main season rainfall will improve availability of water and pasture for livestock consumption to seasonally normal levels. As a result, livestock body conditions and milk productivity will improve seasonally between June and January.
• Relatively improved security conditions and on time onset of rainfall will encourage more return of IDPs in Darfur. FEWS NET assume returns in 2018 return in Darfur, South Kordofan and Blue Nile will be higher than in recent years.
• Access to seasonal agricultural labor is likely to improve during the June to January cultivation season in Sudan. However, reduced area planted and high costs for inputs are likely to reduce the capacity of large-scale farmers to hire laborers typical levels of labor, and will result in below-average access to seasonal agricultural labor opportunities.
• Average to above-average rainfall in June to September 2018 is likely to trigger typical levels of flooding in flood-prone areas that could result in the destruction of crops, assets, displacement, loss of lives and increase susceptibility to water borne diseases.

Macroeconomic conditions

• Severe macroeconomic difficulties are expected to persist in Sudan through January 2019. For the purposes of this scenario, FEWS NET assumes a continued absence of subsidies for essential commodities, including wheat subsidies.
• Fuel availability is likely to remain below average during the scenario period, due to a lack of foreign currency to import fuel, leading to very high fuel prices and transport costs during the scenario period.
• Given likely reduction in agricultural production, staple food import needs will likely be greater than in atypical year. Given the shortage of foreign exchange available, it is likely Sudan will face a greater than normal staple food import gap.
• FEWS NET assume the local currency devaluation will continue during the scenario period in the same manner of recent months.
• The Government of Sudan will continue the policy of restriction of imports of luxury commodities and will increase import taxes. The latter will result in increased consumer prices for all commodities that will lead to increased cost of living.

Livestock prices

• Typical favorable pasture and water conditions during June to September rainy season and typical increased demand for local consumption and for export to Saudi Arabia during Ramadan (May/June) and Eid al Adha (July/August) holidays are likely to maintain high livestock prices, before declining between September and January following the end of the Eid holidays. During the harvest, the availability of alternative income sources (e.g. sale of cash crops and seasonal agricultural labor) will reduce dependency on livestock sale as a source of income by pastoral and agro-pastoral communities of Sudan. Thus, FEWS NET assumes livestock prices will remain high during the scenario period.

Cereal prices

• Staple food prices will remain very high during the scenario period across most markets in Sudan. Sorghum prices will likely increase typically through the June to September peak lean season due to increased seasonal demand and high transportation cost induced by the prevailing fuel shortage and high cost of production. Millet prices are expected to continue to steadily increase during June to September lean season. Sorghum and millet will decrease typically by five to 10 percent by the arrival of the new harvest to markets in November/December 2018. Generally staple food prices during the scenario period will be 25 to 30 percent higher than of the same period last year and 140 to 150 percent higher than of last five-year average (Figure 3).
• Prices for locally produced wheat are likely to remain stable or slightly increase during the post-harvest period of wheat. While prices of imported wheat are likely to remain more than double compared to the same period last year and over 170 percent above the recent five-year average due to extremely high prices of imported wheat and wheat flour following the removal of wheat subsidies and high transportation cost.

Terms of trade

• Since staple food prices are projected to increase further during June to September 2018 lean season, Terms of Trade (ToT) between these sources of income and staple food prices are likely to continue to deteriorate during the lean season. FEWS NET assumes ToT between livestock/daily wage labor and cereal is likely to remain more than 50 percent lower than during the same period last year and the five-year average. Agricultural labor opportunities and wages are expected to start seasonal increases by the start of June to September 2018 rainy season. Agricultural daily wage labor opportunities are likely to decline following completion of the harvest in February 2019, when households will begin to shift to non-agricultural labor.

Security, conflict and displacement

• The decreased pattern of conflict and new displacement since the beginning of year 2017 as a result of unilateral declaration of ceasefire by conflicting parties in South Kordofan, Blue Nile and Darfur and due to collection of illegal arms likely to be maintained during the scenario period. The exception is Jebel Marra area in Darfur, where fighting between SAF and SLM-AW likely to continue forcing civilians to flee their home villages and seek refuge in existing IDP camps. Even though the skirmishes in Jebel Marra are likely to reduce during the June to September rainy season as rains will block roads and constrain movement of troops and equipment.
• FEWS NET assumes the relatively decreased clashes between conflicting parties in South Kordofan, Blue Nile and Darfur will encourage return of IDPs from existing camps and refugees from neighboring countries. It is estimated the wave of return in year 2018 will be higher than in 2017 and the seasonal return for cultivation in Darfur during the scenario period is likely to be higher than of last year.
• Sporadic fighting in Jebel Marra, some parts of Blue Nile and South Kordofan are likely to result in new displacement, but lower than levels of new displacement recorded on recent years.

Most likely food security outcomes

The June 2018 to January 2019 outlook period includes the peak of the lean season between June and September, followed by the October to January harvest period. The protracted conflict in Jebel Marra in South and Central Darfur states and in South Kordofan and Blue Nile states since 2011 has disrupted access to main livelihood activities, function of markets, eroded households’ livelihood asset holdings and limited households’ access to income earning opportunities in these areas. Meanwhile, the persistent sharp increase of staple food prices has reduced the ability of poor households and protracted IDPs to access food through market purchase, especially during the June to September peak lean season when cereal prices will highest. The persistent macroeconomic challenges in the form of high inflation and local currency devaluation have resulted in reduced purchasing power for many households in Sudan, particularly poor households. Approximately 20-30 percent of IDPs and poor households in SPLM-N controlled areas are likely to face significant food consumption gaps between June and September 2018 and will be in Emergency (IPC Phase 4). Recently displaced IDPs in Jebel Marra are likely to be in Emergency (IPC Phase 4), while households areas of North Darfur and Kassala affected by severe dryness during 2017, and refugees from South Sudan, are likely to be in in Crisis (IPC Phase 3) between June and September 2018. The deteriorating macroeconomic conditions will continue to erode the purchasing power of many households and increase the number of food insecure people to above-average levels during the first half of the scenario period.

Typically, food security outcomes improve between October and January, households benefit from access to food through own harvest, seasonal declines of staple food prices, and improved access to income from the sale of cash crops and/or seasonal agricultural labor during October to January harvest period. Food security outcomes for IDPs and poor households in SPLM-N controlled areas will improve from Emergency (IPC Phase 4) to Crisis (IPC Phase 3), as will outcomes for new IDPs in Jebel Marra. Food security outcomes for many populations affected by severe dryness in 2017 will improve from Crisis (IPC Phase 3) to Stressed (IPC Phase 2) and Minimal (IPC Phase 1). However, staple food prices are likely to remain very high even into the harvest period. The number of people facing Crisis (IPC Phase 3) levels of food insecurity during the second half of the scenario period will reduce compared to the peak lean season, but likely to be higher than last year and average of recent years due high staple food prices and lower than normal purchasing power.

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