High food prices limit household purchasing power

Poor rural households will be classified in Stressed (IPC Phase 2) through June as they continue to adjust the quality and quantity of foods in their diet. As the lean season progresses, low income, atypical debt, and high food, transportation, and agricultural input costs will precipitate the use and intensification of negative coping strategies and will increase the number of households experiencing Crisis (IPC Phase 3) outcomes. Poor households in the eastern and western Dry Corridor and in the areas affected by storms Eta and Iota will face Crisis (IPC Phase 3) outcomes throughout the outlook period as, in addition to facing high food prices, they have neither savings nor sufficient income to avoid the use of negative coping strategies to cover their minimum food needs.

Although markets are well supplied with staple grains, prices are continuing an upward trend. In February, the price of white maize increased by 29 percent compared to last year and 42 percent compared to the five-year average. In the first half of March in La Terminal market, the price of a quintal of white maize reached 200 GTQ (around 26 USD), the highest price registered since 2013. In February, beans also increased compared to last year and the five-year average, by 18 percent and 38 percent, respectively.

In February, the price of regular gasoline increased by 36 percent, diesel rose by 48 percent, and propane gas, which is subsidized, still rose by 5 percent, compared to the previous year. Similarly, they showed positive variations of 59 percent, 91 percent, and 29 percent, respectively, compared to the five-year average. There were also increases in other high-consumption products, such as bread, oils, and sugar, which have experienced significant price increases in recent months. The prices of these products are expected to remain above those of 2021, restricting household purchasing power.

Starting in March, land preparation activities begin for the next agricultural production cycle. Meanwhile, in the higher altitude Western Highlands, residual moisture from recent cold fronts has allowed planting to begin. This year, farmers are facing high costs of fertilizers, which have been increasing since the end of 2021 and which, in February 2022, registered increases of more than 100 percent compared to last year, such as in the case of Urea. High agricultural input costs could be reflected in reduced usage of fertilizers and other inputs and/or reductions in cropped area, which would result in lower production and labor demand.