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Purchasing power will be further strained amid subsistence production losses

  • Key Message Update
  • El Salvador, Honduras, and Nicaragua
  • September 2023
Purchasing power will be further strained amid subsistence production losses

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  • Key Messages
  • Key Messages
    • The poorest households in the Dry Corridor of El Salvador and Honduras will face Crisis (IPC Phase 3) outcomes until the primera harvest in September, when the majority of rural producers households will experience greater availability of staple grains, generating stocks for one or two months. However, those who reported total losses will not have reserves and must continue to rely on market purchases. Starting in October and through January 2024, seasonal prices decreases and increased income from the annual peak demand for rural labor and end-of-year commercial and tourist activities will enable a portion of households in Crisis to shift into Stressed (IPC Phase 2) food insecurity. The remaining poor urban and rural households in the region already in Stressed (IPC Phase 2) food insecurity will stay Stressed due to the persistence of high prices, which limits their purchasing power.
    • Irregular rains combined with atypically high temperatures resulting in poor crop development and a higher incidence of pests (such as fall armyworm) are expected to cause losses of more than 25 percent in primera subsistence production. For the postrera season, current weather conditions suggest a delay in its start due to low soil moisture. Although an improvement in rainfall accumulation is expected for the rest of the season, except in Nicaragua, the continuous high temperatures and reduced access to inputs will also cause a reduction of at least 25 percent in subsistence production in the most affected areas. On the other hand, similar to during the primera cycle, national production and market supply are not expected to be significantly affected due to imports and a greater investment capacity and availability of irrigation by commercial producers.
    • Although inflation has eased compared to the considerable increases reported in 2022 and early 2023, it remains high, limiting the population’s purchasing power. In August, the basic food basket increased over seven percent compared to the prior year and over 25 percent above pre-pandemic values (2019), while the food component that includes red beans showed interannual increases of 6.1, 8.3, and 9.0 percent in El Salvador, Honduras, and Nicaragua, respectively. Similarly, corn showed a month-on-month increase of 5.9 percent in Nicaragua, and up to 71.6 percent compared to the five-year average in the three countries. In the coming months, inflation will continue to slow. However, prices above the five-year average will continue, putting pressure on food access for poor households given higher production and transportation costs, as well as speculation over crop losses from irregular rainfall.

    Recommended citation: FEWS NET. El Salvador, Honduras, and Nicaragua Key Message Update September 2023: Purchasing power will be further strained amid subsistence production losses, 2023.

    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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