Economic warfare is worsening access to food, as Aden’s rial hits historic low

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In late 2024, FEWS NET projected widespread Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!)ⁱ outcomes would persist through May 2025 in areas controlled by the internationally recognized government (IRG), largely due to the impact of above-average food prices and a weak labor market on household purchasing power. In areas controlled by the Sana’a-based authorities (SBA), FEWS NET expected Crisis (IPC Phase 3) and Emergency (IPC Phase 4) outcomes, reflecting a scarcity of household food and income sources, high food prices, low household purchasing power, and limited delivery of humanitarian food assistance. Countrywide, 18.0-18.99 million people (50-55 percent of the population) were expected to need food assistance to prevent food consumption gaps.
In 2025, the impacts of domestic and regional conflict on the economy are driving an increase in the magnitude and severity of acute food insecurity. In IRG-controlled areas, the Aden-based YER is losing value and government salary payments remain irregular. In SBA-controlled areas, food and fuel imports have declined and strict price controls are limiting traders’ ability to manage higher distribution costs. The loss of key sources of humanitarian funding has sharply reduced food assistance beneficiary targets by approximately 65 percent and 40 percent, respectively, from late 2024 to mid-2025. Over 50 percent of Yemen’s population will likely face moderate-to-large food consumption gaps through December 2025. The areas of highest concern under IRG control are Lahij, Ma’rib, Al Dhale’e, and parts of Al-Hudaydah, Al-Jawf, and Ta’izz governorates, while those under SBA control are Al-Hudaydah, Hajah, and parts of Al-Jawf and Ta’izz.
In IRG-controlled areas, the SBA’s blockade of the IRG’s oil exports continues to drive a sharp drop in revenue and currency shortage. Oil exports previously accounted for 63 percent of total exports, 70 percent of budgetary resources, and 30 percent of GDP. Since October 2022, the loss of oil exports has triggered a macroeconomic slowdown, despite efforts by IRG allies like Saudi Arabia, which attempted to ease the crisis with a 500 million USD deposit into the Aden-based Central Bank. In June, the Aden-based YER fell to an all-time low of over 2,600 YER/USD, a 48 percent decline since June 2024. Daily exchange rate data in July show the value continues to drop, surpassing 2,900 YER/USD by July 20. Limited access to foreign currency reserves further strains the IRG parallel markets and exchange shops, leading to increased exchange rates and further depreciation of the currency due to high demand.
While the low value of the Aden-based YER is increasing costs for traders to import goods to IRG-held areas, food import volumes rose by 13 percent between January and May 2025 compared to the same period in 2024, according to the Aden-based General Authority for Standardisation and Metrology. This increase in volume is attributed to seasonal demand and strategies implemented by traders for importing goods. Regardless, the depreciation of the YER and attacks on oil infrastructure have pushed fuel prices upward and accelerated food prices to record levels. Fuel prices rose by 22-30 percent from June 2024 to June 2025, contributing to high transport and food distribution costs. As of June 2025, the cost of the minimum food basket was 184,316 YER, representing a 38 percent increase from June 2024. Wages have risen for skilled jobs, but household purchasing power across IRG areas ranges from similar to worse compared to 2024.
In SBA-controlled areas, regional conflict related to the Israel-Hamas war has damaged key port and energy infrastructure and reduced food and fuel imports since late 2024. U.S. airstrikes in March and April 2025 (before the May ceasefire), combined with periodic Israeli airstrikes, have caused a 26 and 37 percent decrease in food and fuel imports, respectively, from January to June 2025 compared to the same period in 2024, according to Sana’a-based Customs Authority. After nearly two months of relative de-escalation, the SBA’s July 6 and 8 attacks on two commercial ships in the Red Sea and missile strikes on Israel risk re-escalating tensions and import disruptions. Other factors driving decreased food imports include the SBA’s ban on wheat flour imports via Al-Hudaydah and As-Salif ports since January 2025 to protect domestic wheat milling. Frequent fuel supply disruptions risk undermining flour-milling operations, despite the milling sector’s sufficient processing capacities (12,250 MT/day).
The SBA’s use of strict price regulations has largely continued to shield households from further declines in already-low purchasing power, but increasing liquidity constraints and dwindling access to foreign reserves are emerging vulnerabilities. Household purchasing power is already similar-to-worse than that recorded in IRG-controlled areas. Persistent currency shortages are disrupting bank operations, with some banks stopping withdrawals while others have imposed limits. These shortages, coupled with price controls, are stalling small business activity, reducing consumer spending power, and shrinking trader profits to the point of putting many of them out of business. The price of the minimum food basket rose to 47,783 YER in June, a 4 percent increase from last month and last June. Furthermore, the designation of the SBA as a foreign terrorist organization (FTO) and associated sanctions on April 5, 2025, threatens the ability of Yemeni banks to operate and poses risks to remittance transfers and humanitarian operations. Major Yemeni banks are relocating from SBA-controlled Sana’a to IRG-controlled Aden, further intensifying the economic conflict between the two sides.
Recent actions by the IRG and SBA are threatening further macroeconomic deterioration in the coming months. In 2016, the Central Bank (CBY) relocated from Sana’a to Aden to strengthen IRG control over the monetary system and protect foreign reserves, introducing new YER banknotes. The SBA banned the notes, maintaining use of the older Sana’a-based currency and effectively forming two economic zones with rival monetary authorities. The division triggered a prolonged economic conflict, resulting in currency depreciation in IRG areas and severe cash shortages in SBA-controlled areas due to worn-out notes and a ban on replacements. On July 15, 2025, the Sana’a-based Central Bank issued a new 200 rial note, following the May release of 50 and 100 rial coins to address currency shortages. The Aden-based CBY condemned the move as a breach of the 2024 UN-brokered financial agreement. These developments risk further destabilization of the economy, which would worsen already dire living conditions for millions of Yemenis.
Seasonal food and income from harvests in late 2025 are expected to be below last year and the five-year average. The first rainy season (March-May) was among the driest on record, with cumulative rainfall ranking 25-40 percent below average. The second rainy season (June-September) also underperformed until late July, marked by widespread dryness and above-average temperatures. These conditions, coupled with above-average fuel and agricultural input costs, have reduced area planted and lowered cereal and horticultural crop yields except for localized coastal areas, according to current vegetation conditions. Although above-average rainfall is forecasted for August-September, high temperatures and a short duration will likely limit crop recovery. Additionally, the likelihood of high-intensity rainfall after prolonged dryness increases flash flood risk. Poor households that rely on own production will likely have less than two months of food stocks, compared to the average harvest of two to three months of food stocks prior to 2015.
The current plan for WFP food assistance distributions aims to assist 3.4 million people in IRG-controlled areas and 1.7 million people in SBA-controlled areas per two-month distribution cycle. However, the termination of WFP’s key funding sources has reduced beneficiaries reached to a fraction of the total need. In IRG-held areas, the third food assistance distribution cycle was completed in June, reaching over 1 million people across all governorates, 70 percent below target. In July, the fourth cycle of distributions began, but distribution data are not yet available. In SBA-controlled areas, WFP was able to resume deliveries under the Targeted Emergency Food Assistance program in late July after a three-month suspension. Preliminary data indicate 803,000 people received food across 25 districts, 53 percent below target. Other challenges complicating distributions include the impact of the FTO designation on compliance requirements for financial transactions, including payments to in-country humanitarian partners.

Recommended citation: FEWS NET. Yemen Key Message Update July 2025: Economic warfare is worsening access to food, as Aden’s rial hits historic low, 2025.

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.