Moderate drops in bean prices allow for slight improvements in access to food

The postrera harvest allowed for improvements in the availability of reserves for producing households and a slight decrease in reported prices, although it did not generate the typical amount of reserves or the expected seasonal price drops. Despite this, poor rural households remain Stressed (IPC Phase 2) given seasonal employment opportunities, which will continue until February and which favor access to food. However, due to continued high prices and previous shocks, there are still pockets of households experiencing Crisis (IPC Phase 3) outcomes. Although this population will gradually increase as the lean season sets in amid continued high food prices, most households are expected to remain Stressed (IPC Phase 2) through May 2023.

In December, fuel prices fell slightly in Honduras, following international trends, while in El Salvador and Nicaragua, prices remain frozen. However, all continue to be up to 20 percent above 2021 levels. Headline inflation, on the other hand, was stable in December, showing year-on-year variations of 7.3, 9.8, and 11.6 percent for El Salvador, Honduras, and Nicaragua, respectively. Despite the fact that these have slowed down during the second half of 2022, they remain high. The same happened with food inflation, which reports interannual variations of 12.2, 15.8, and 15.9 percent, respectively. The seasonal increase in income allowed households to absorb part of these increases, but they will still mean a reduction in future purchasing power, especially for rural and urban households who depend on informal labor.

White maize prices reported stability in December compared to the previous month, which suggests a constant supply in the market. On the other hand, red bean prices showed moderate reductions of 5.3 percent, 6.2 percent, and 9.8 percent in El Salvador, Honduras, and Nicaragua, respectively, in response to postrera harvests. However, compared to last year and the five-year average, both products continue at atypically high prices, as a result of the high, persistent inflation, the increase in production costs, a greater demand after the climate shocks that occurred in previous years, and a speculative dynamic with instances of hoarding by some producers.

Thanks to favorable forecasts for rain and soil moisture, the apante harvest in February/March is expected to be average, which will allow for the continued supply of red beans for the coming months. Similarly, current weather forecasts are expected to allow for an average start of the primera cycle in April/May. However, small producers are expected to reduce cropped area due to the continued high prices of agricultural inputs.