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High commodity prices and the socio-political crisis continue to have a negative impact on food security

  • Food Security Outlook Update
  • Haiti
  • April 2022
High commodity prices and the socio-political crisis continue to have a negative impact on food security

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  • Key Messages
  • CURRENT SITUATION
  • UPDATED ASSUMPTIONS
  • PROJECTED OUTLOOK TO SEPTEMBER 2022
  • Key Messages
    • Between February and March, rainfall of around 7 percent above average was recorded at the national level. During this period, these conditions favored the planting and development of spring crops, as shown by the above-average vegetation index. Despite these favorable conditions, farmers were forced to limited their planted area due to the high cost of agricultural supplies (fertilizer, seeds, and pesticides) and labor, negatively impacting production during the season.

    • The political and security situation continues to deteriorate. In addition, gang-controlled areas are expanding in the central, southern, and southeastern regions of the country. Civilian populations— the group most impacted by this insecurity — are being forced to slow down commerce in order to limit their exposure to the risk of kidnapping. Populations are also migrating to other regions and countries in response to the insecurity.

    • From April 2021 to April 2022, the gourde (HTG) lost more than 20 percent of its value against the U.S. dollar. In the informal market its value has declined even more. A difference of up to 16 percent can be observed between the official rate of the national currency and the informal market rate, and this is closely correlated to the prices of imported products. As a result, the prices of imported products remains high compared with the five-year average.

    • Increasing commodity prices and a lack of employment opportunities are having a negative impact on the purchasing power of poor households, which are highly dependent on the market for their food consumption. Disruptions to their livelihoods is forcing households to adopt Crisis or Stressed coping strategies to maintain their current level of food consumption. Food insecurity persists, especially in the poor neighborhoods of Port-au-Prince. Areas affected by the earthquake are receiving little assistance, and dry areas lacking access to irrigation systems are more vulnerable to rainfall and price shocks. As a result, these zones are in Crisis (IPC Phase 3) with remaining zones Stressed (IPC Phase 2).


    CURRENT SITUATION

    Higher oil prices. Since the start of the Russian-Ukrainian conflict at the end of February, the price of oil on the international market has shown significant volatility, fueled mainly by the reactions of the main players (e.g. Russia, the European Union, and the United States) to the Ukrainian crisis. The latest price adjustment for oil products dates back to December 10, 2021. At the time of the adjustment, the international market price was approximately 70 USD per barrel.

    The government of Haiti has announced a gradual price adjustment. However, despite a price rise of more than 30 percent on the international market, increasing Haiti’s oil bill, the government is not yet making any further adjustments to the price at gas stations, given the unfavorable context for implementing this decision. Transport costs are already very high. However, the artificial shortages at gas stations in recent days are causing panic among car drivers who are rushing to fill up, leading to an increase in prices on the parallel market. In fact, the price of a gallon of petrol on the parallel market is 500 HTG, whereas it has been set by the Haitian State at 250 HTG since December 10, 2021.

    Depreciation of the gourde. From April 12, 2021 to April 12, 2022, the gourde exchange rate to the U.S. dollar increased from 81 HTG to 106 HTG, representing a depreciation of more than 23 percent. This depreciation of the exchange rate kept inflation at the high level of 25 percent in March 2022, compared to 17 percent in March 2021.

    Socio-political situation. Socio-political instability continues to disrupt livelihood activities, especially in urban centers, and even in other parts of the country, including the central and western regions. People in these areas are often significantly impacted by security concerns and are forced to slow down their economic activity to limit their exposure to kidnapping for ransom. Migration (intermunicipal, interdepartmental and even international) is another strategy used by the population in response to the insecurity in the country.

    Rainfall and trends in the agricultural growing season. Vegetation conditions on the ground have continued to improve thanks to average to above-average rainfall in most parts of the country since February (Figure 1). These conditions have facilitated sowing and the normal development of spring crops. However, agricultural activities of this growing season have already been limited by lack of access to agricultural supplies (seeds, fertilizers, and pesticides) and labor by farmers, limiting the planted area. From late March to mid-April, the price of fertilizer increased by about 6 percent to approximately 6,900 HTG per 50 kg bag.

    Income sources. Although the demand for labor increased seasonally with land preparation for the spring growing season, income from this source is average to below-average due to farmers' limited capacity for recruitment, as a result of socio-political and economic shocks and residual impacts of climate change, reducing their ability to invest in agriculture. Income from migration to the Dominican Republic remains below average due to the continued deportation of Haitians to the Dominican Republic and the increasingly difficult access to Dominican visas (increasing the price and time required to process visa applications).

    Food prices and availability in the markets. The markets have functioned normally, apart from some disruptions caused by gang activities in the metropolitan area of Port-au-Prince, particularly in Croix-des-Bossales and Croix-des-Bouquets. At the same time, the prices of almost all the food products monitored have risen, especially local maize, which remains on an upward trend, as well as wheat flour. Although the prices of local beans, imported rice, and cooking oil are increasing, they are relatively stable, with rises of around 4 percent. The impact of the Russian-Ukrainian conflict is indirectly beginning to be felt on the various Haitian markets, particularly for fuel, cereals, and other non-food items. Prices for these items are unusually high and  remain above March 2021 levels and their five-year average.

    In addition, the availability of local products (roots, tubers, and bananas) is below the seasonal average. Maize and beans are very rarely seen in this sowing season, until the harvest in June. Mangos are currently an important source of food for the poorest households and have been observed in markets. High commodity prices continue to have a negative impact on poor and very poor households' access to food and their food security. Reduced household access to food is compounded by the depreciation of the gourde exchange rate against the U.S. dollar, the anticipation of possible adjustments in fuel prices, and the lean season period.

    Current food security outcomes. Household purchasing power continues to be negatively impacted by rising prices and low income levels, adversely impacting food insecurity status. Livelihoods remain fragile. Some households, mainly in the lower Nord-Ouest region, Haut Plateau Central, and Haut Artibonite, urban poor neighborhoods, dry areas in the north, and hard-to-reach earthquake-affected areas, are using Crisis (IPC Phase 3) coping strategies, including increased sales of charcoal and livestock, consumption of seeds and low-nutrient food, etc., to feed themselves. In areas less affected by climatic shocks, households are resorting to Stressed (IPC Phase 2) coping strategies, such as reducing expenditures on non-essentials, increasing food purchases on credit, consuming non-preferred food, and adults reducing their food consumption to ensure their children are fed, in order to maintain their current level of consumption.


    UPDATED ASSUMPTIONS

    The assumptions of the most likely FEWS NET scenario for February to September 2022 have not changed, with the exception of the following updated assumptions:

    • The projected gap between the global increase in cereal production and demand may be larger as a result of the crisis in Ukraine, due to declining production in Ukraine and Russia, and trade constraints due to sanctions and supply chain disruptions. These limitations will therefore have an impact on the food price index (for wheat flour, maize, and vegetable oil) on the international market. Given the importance of imported products in Haiti, price increases on the international market would lead to rises in domestic markets.
    • Increasing prices for agricultural supplies would reduce the area under cultivation and demand for agricultural labor during the spring agricultural growing season.
    • United States Geological Survey (USGS) forecasts suggest slightly above-average temperatures during the spring growing season.

    PROJECTED OUTLOOK TO SEPTEMBER 2022

    Overall, the surge in prices on the international market as a result of the Russian-Ukrainian conflict will impact local prices and access to food, especially for poor households. The number of people in food insecurity will increase between April and May and decrease between May and September. The increase between April and May is due to the high dependency of poor households on the market, due to the depletion of stocks and the reduced supply of local products during this period, in a context of high prices and low incomes. The improvement in food security from June to September is due to a slight decrease in dependency levels of poor households on the market following the spring harvest.

    Most areas of the country, in particular HT08 Sud and Grand Anse, HT07 Nippes, Ouest and Sud-Est, HT02 Nord-Ouest, Haut Artibonite, Haut Plateau, dry areas in the north, northeast, and northwest (which are more vulnerable to climatic and price shocks), poor neighborhoods in Port-au-Prince and earthquake-affected areas will be in Crisis (IPC Phase 3). In the rest of the country, where winter harvests have taken place and people are preparing to launch the spring 2022 growing season, very poor and poor households will reduce purchase of non-essential expenditures, increase food purchases on credit, and consume non-preferred or low-quality foods, and adults will reduce their food consumption to ensure their children are fed. Households in these areas will be Stressed (IPC Phase 2).

    Figures

    Figure 1

    Figure 1

    Source: USGS/FEWS NET

    Figure 2

    Seasonal Calendar

    Source:

    This Food Security Outlook Update provides an 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 over the next six months. Learn more here.

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