Staple food prices are declining but remain significantly above the five-year average

The recently concluded harvests are improving household food access in most areas of Sudan, leading to a reduction in the proportion of households facing Crisis (IPC Phase 3) outcomes; however, Stressed (IPC Phase 2) outcomes remain widespread due to the impact of the poor macroeconomic conditions. Additionally, many conflict-affected and poor households in Darfur, Blue Nile, Kordofan, Kassala, and Red Sea states continue to face Crisis (IPC Phase 3) outcomes in January as household access to food and income remains low due to the impact of insecurity and high food prices. These areas will likely continue to face higher-than-normal humanitarian food assistance needs during the post-harvest period through to the beginning of the lean season in May 2023.

Sudan's macroeconomic situation remains poor in January 2023 due to persistent low foreign currency reserves, longstanding political instability, the weak exchange rate, and the high inflation rate. On January 27, the SDG exchange rate was trading at 594 SDG/USD on the parallel market and 585 SDG/USD in most commercial banks, compared to 485 and 440 SDG/USD in January 2022 in the parallel market and the commercial banks, respectively. From November to December, the Consumer Price Index (CPI) remained stable, although annual inflation declined to 87 percent. The CPI is being driven primarily by increases in the cost of education, and food and beverages, which are 89 and 65 percent higher than last year, respectively. The high cost of living is continuing to reduce households’ purchasing power for their food and non-food needs.

The preliminary findings of the recently conducted joint Crop and Food Supply Assessment Mission (CFSAM) estimated that the overall national cereal production for the 2022/23 cropping season was higher than last year and near the five-year average despite reductions in the area planted. This overall improvement was attributed in large part to a shift in production from cash crops to less resource-intensive crops (sorghum and millet) due to the high costs of production for cash crops and wheat, limited access to agricultural finance, shortage and high cost of agricultural inputs; as well as to the more favorable weather conditions this year that resulted in improved yields per unit for different crops compared to last year and the five five-year average.

Staple food prices have continued to decline seasonably across all markets since the start of the harvest in October 2022. In January, sorghum and millet prices are 20 to 30 percent lower than in October 2022 but remain approximately 100-135 percent higher than respective prices in January 2022 and more than four times higher than the five-year average. Cereal prices will likely continue to decrease seasonally through the post-harvest period, before beginning to seasonally increase through the lean season, peaking around September 2023. Cereal prices are anticipated to remain more than three times above the five-year average, driven by the high cost of production, the weak exchange rate, and high international food prices, contributing to ongoing high inflation in the country.

Livestock prices are expected to remain relatively stable in most markets through April 2023, which in combination with declining cereal prices will translate to a relative improvement to the livestock-to-cereal terms-of-trade in favor of livestock owners. Livestock prices will likely decrease seasonally between May and September 2023, the lean season, as households from pastoral and agropastoral groups sell more livestock for income to purchase food. Overall, livestock prices are expected to remain almost 50-75 percent higher than last year and over 300 percent above the five-year average through May 2023 due to high inflation and local currency depreciation.