Purchasing power remains limited, but maize and bean crops are developing normally

Below-normal income among poor and very poor households and high transportation and food costs are increasingly limiting household purchasing power, driven by the persistent economic effects of the COVID-19 pandemic and related movement restrictions. Through January 2022, poor urban households will likely face Stressed (IPC Phase 2) outcomes. Meanwhile, poor rural households will likely face Crisis (IPC Phase 3) outcomes until September since their access to food will likely worsen during the peak of the lean season.

Beginning in October, the primera cycle harvests and anticipated normal levels of agricultural labor demand will allow most poor rural households to improve their income, diet, and nutrition, resulting in Stressed (IPC Phase 2) outcomes. However, poorer households in areas affected by hurricanes Eta and Iota and areas of the Dry Corridor that carried over food consumption deficits from past shocks will likely continue to face Crisis (IPC Phase 3) outcomes. For these latter households, seasonal improvements in food security will likely be insufficient for them to avoid the use of negative coping strategies.

Primera crops are developing favorably, and an average harvest is expected given typical canícula dry spells and a forecast of normal rainfall. According to the Guatemalan Institute for Seismology, Vulcanology, Meteorology, and Hydrology (INSIVUMEH), rainfall from August to October is expected to be above average on the western border with Mexico and part of the southern coast and average in the rest of the country. However, increased rainfall may cause flooding in localized areas. Excess humidity could cause fungal diseases, particularly in beans, affecting subsistence farmers who lack the resources to respond to this.

The wholesale price of a 100 lb. bag of white maize continued to rise in June, reaching 14 percent above the five-year average. In early July, it was approximately 13 percent higher than June. Diesel and gasoline prices have remained considerably higher than the five-year average since May. Meanwhile, public transportation is still irregular and scarce, and prices are significantly above those pre-pandemic, resulting in the use of more expensive private means of transportation. These increases are reflected in higher food prices and result in a further reduction of household purchasing power.