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High prices remain the key driver of food insecurity in the LAC region. Irregular climate conditions in Central America and violence in Haiti also contribute to restricting food consumption.

  • Key Message Update
  • Latin America and the Caribbean
  • August 2023
High prices remain the key driver of food insecurity in the LAC region. Irregular climate conditions in Central America and violence in Haiti also contribute to restricting food consumption.

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  • Key Messages
  • Key Messages
    • In Haiti, spring harvests are underway, but due to prolonged atypical drought, flooding in June, , and insecurity, they resulted in yields below the five-year average. Poor households in most of the country, whose food security has not improved due to limited job opportunities and high staple food prices, will remain in Crisis (IPC Phase 3) acute food insecurity. 

    • Although gang violence decreased slightly in June compared to May, it remains high compared to the same period of the previous year. Insecurity is mainly concentrated in Port-au-Prince, Nord-Ouest, and Artibonite and continues to have direct consequences on the normal functioning of markets, economy, and transportation.  Since mid-April, the HTG continued to appreciate against the USD. However, in a yearly comparison from July 2022 to July 2023, the HTG, compared to the USD, lost its value by more than 20 percent, which continues to contribute to the deterioration of the purchasing power of poor households compared to last year. Thus, compared to the previous months, the fall in the price of imported, local food and fuel largely did not change access to markets for the poorest households.

    • In Central America, until September, the poorest households in the Dry Corridor of Guatemala, El Salvador, and Honduras will face Crisis outcomes (IPC Phase 3) as a consequence of the seasonal deterioration of food security (lack of food reserves, high market dependence, and low season of labor demand), and previous years’ shocks. These households will apply unsustainable coping strategies and struggle to close their food consumption gaps. In the last quarter of the year, the proportion of households in Crisis (IPC Phase 3) will decrease, driven by high labor demand in agricultural activities such as coffee and the primera harvest. The rest of the region's poor urban and rural households, who face limitations in their purchasing power due to high prices, will continue to face Stressed (IPC Phase 2) outcomes until January 2024.

    • A reduction in the production of subsistence crops is expected due to one month delay in the start of primera season and anomalies in the rainfall between June and July. Given the continuity of the El Niño phenomenon, the accumulated rainfall will be below average and high temperatures will persist during the rest of the primera cycle and the beginning of the postrera, which will cause a reduction of yields of subsistence farmers. However, a moderate impact on national production is expected due to investment and irrigation capacities. Coffee production will also be affected by climate anomalies, reducing the demand for labor. Poor households' purchasing power remains limited due to the persistence of high prices for basic food products and high inflation. 

    • In Venezuela, the limitations on households' financial access to food continue, resulting in Stressed (IPC Phase 2) food security outcomes. However, many poor households in peri-urban areas especially in Zulia and Caracas, earn their income in local currency, and lack access to social benefits or remittances are likely facing food consumption gaps indicative of Crisis (IPC Phase 3). Between October and January, an improvement in the level of acute food insecurity is expected due to an improvement in economic activity with the distribution of double salaries in public and private sectors. These factors indirectly impact poor households working in the informal sector. Therefore, the number of households in Crisis (IPC Phase 3) will decline, but large populations will remain Stressed (IPC Phase 2).

    • The VED lost 6.7 percent of its value between May and June due to reduced USD supply in the foreign exchange market. The recent expansion of public spending allocated funds to cover the increased benefits on Cesta Ticket, the Bono Contra la Guerra Económica, and the Unidad Tributaria (UT), which is used to calculate utility rates and taxes. These additional public expenditures and the depreciation of the local currency contributed to an increase in inflation, which continues to limit the purchasing power of the poorest households. On the other hand, households earning and purchasing in USD face lower inflation levels and have more stable purchasing power. Food prices in VED and USD remain above the five-year average, with USD prices affected by high global food prices and rising fuel and transportation costs. From May to June, prices in VED and USD were stable; meanwhile, food prices remained above 2022. Markets were well supplied with imported and locally produced food.

    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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