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Seasonal improvements in income and reserves diminished by high prices

  • Key Message Update
  • El Salvador, Honduras, and Nicaragua
  • December 2021
Seasonal improvements in income and reserves diminished by high prices

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  • Key Messages
  • Key Messages
    • As the season of peak demand for unskilled labor progresses and the postrera harvests conclude, food access and availability, as well as food security, are improving. However, the continuation of high food, fuel, and service prices throughout the region is limiting economic recovery. High prices negatively affect the purchasing power of urban households, non-producing rural households, and rural households who saw reduced harvests and who are depending earlier than usual on the market as a source of food. These households are therefore experiencing Stressed (IPC Phase 2) outcomes through May 2022.

    • For households in the Dry Corridor and eastern Honduras, rainfall deficits registered during the postrera season are adding agricultural losses to those reported during the primera season, leading to fewer reserves. This, together with lower coffee production due to damage suffered in 2020 as a result of storms Eta and Iota and due to an increase in the incidence of coffee rust disease, will cause Crisis (IPC Phase 3) outcomes at least through May 2022.

    • Employment levels in both urban and rural areas will increase seasonally due to an increase in economic activity during the holidays. Activity is fueled in part by the sending of remittances (received mainly by middle-income households) and by the high demand for unskilled labor related to cash crop harvests, such as coffee, sugar cane, and others. Nevertheless, high inflation will not allow a significant recovery of income and livelihoods to offset the shocks suffered in 2020.

    • Although white maize wholesale prices decreased slightly between October and November, they were up 36.4, 23.0, and 70.6 percent in San Salvador, Tegucigalpa, and Managua, respectively, compared to the previous year. On the other hand, red bean wholesale prices increased around 9 percent between October and November in Tegucigalpa and Managua and 19.2 percent compared to 2020 in Tegucigalpa, while they remain stable in the other markets. Behind this anomalous behavior is an increase in inflation, caused by macroeconomic factors, an increase in the cost of transportation and fertilizers, and localized postrera losses.

    • Current forecasts indicate cumulative rainfall to be close to average for the entire region in the coming months, although for central and eastern Nicaragua, cumulative rainfall is likely to below-average, slightly reducing postrera tardía/apante harvests, which arrive February to March.

    This Key Message Update provides a high-level 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. Learn more here.

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