Staple food prices expected to reach record high levels in June

This Special Report reviews current staple food price trends and market dynamics in Sudan in order to understand the potential impacts of above-average cereal prices on food security. Based on analysis of market supply and demand drivers, combined with an assessment of historical price trends, this Special Report develops market assumptions and price projections for the April to August 2014 period. FEWS NET’s forthcoming April 2014 Food Security Outlook will consider the broader food security situation in Sudan and present projected food security outcomes for the April to September 2014 period.

• Cereal prices, which have continued to increase unseasonably across most markets in Sudan during the post-harvest period, are significantly above average. The increases are due to the far below-average 2013/2014 harvest, high production costs, increased transportation and other marketing costs resulting from the partial removal of the fuel price subsidy in late 2013, and the nearly 30 percent devaluation of the local currency in November 2013.

• Food prices in Sudan typically increase over the May to August lean season. However, FEWS NET believes that agroclimatic and macroeconomic shocks experienced in 2013 are likely to put additional upward pressure on prices this year, resulting in record-high staple food prices across most of the country from April through August. Prices are expected to increase rapidly from April through July 2014. Beginning in mid-August, market pressure is likely to decrease as early harvests are available, but any impact on prices will depend on the harvest outlook.

• To understand the potential impacts of above-average cereal prices, FEWS NET developed price projections in three representative areas of the country. In Gedaref, the country’s grain basket, sorghum prices will be more than double their respective five-year average levels by August. In Nyala (South Darfur), where prices are currently among the highest in the country, FEWS NET expects that millet and sorghum prices from April to July will be 151 and 130 percent above average, respectively. In Kadugli (South Kordofan), ongoing grain distributions by the government and donor organizations will be insufficient to meet demand, and prices through August will likely remain within their current range, which are more than double the five-year average.

• Given these price expectations, along with the likelihood of ongoing macroeconomic instability and continued widespread conflict, food access will be constrained for poor households in many areas, particularly those in deficit-producing areas. The size of the food insecure population is expected to peak at nearly 5 million people in June 2014, with widespread Stressed (IPC Phase 2) and Crisis (IPC Phase 3) food insecurity, concentrated in Darfur, South Kordofan, Blue Nile, Red Sea, Kassala, North Kordofan, and White Nile states. Emergency (IPC Phase 4) is expected in the Sudan People’s Liberation Army-North (SPLM-N)-controlled areas of South Kordofan.