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Food prices further increase as the Yemeni Rial depreciates

  • Key Message Update
  • Yemen
  • March 2020
Food prices further increase as the Yemeni Rial depreciates

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  • Key Messages
  • Key Messages
    • In Yemen, Crisis (IPC Phase 3) outcomes are currently widespread in the presence of large-scale humanitarian food assistance. In the coming months, macroeconomic conditions are likely to continue deteriorating due to severe currency shortages, expected to further increase food prices and restrict access to income. Throughout 2020, it is anticipated that over 17 million people will be in need of monthly humanitarian food assistance. A risk of Famine (IPC Phase 5) persists and would be possible if there are significant disruptions to port operations – thereby limiting the country’s capacity to import food – or other significant restrictions on food supply to inland markets for a prolonged period of time. Recent reports indicate that beneficiaries in northern areas of Yemen will likely face a 50 percent reduction in food assistance starting in April, as a result of the restrictive operating environment. FEWS NET is in the process of confirming details related to the potential reduction and will release an analysis in April related to these likely cuts.

    • According to FAO market monitoring data, food prices increased between January and February 2020 for the second month in a row. These increases were greatest among imported commodities, with the national average price of wheat flour increasing by 3.8 percent. These price increases are largely attributable to the continued depreciation of the Rial since November 2019, which has increased the cost of imports, as well as to divergent exchange rates between northern and southern areas. According to UNVIM reporting, monthly food import levels through the Red Sea Ports have continued to decline since October, by an average of per 29,731 tons per month. This is in line with expectations that foreign currency shortages will progressively reduce import capacity and drive food price increases.

    • Recently escalated conflict in Sana’a, Ma’rib, and Al Jawf has continued into mid-March according to data from ACLED. According to the United Nations Population Fund (UNFPA), over 40,000 people have been displaced by this conflict since January 19. Displacement separates people from assets and livelihoods, often restricting access to food and income. Previously and newly displaced households in Ma’rib City and Sana’a governate remain in urgent need of humanitarian food assistance and essential non-food items. High levels of conflict continue in Al Dali’, Tai’zz, and southern areas of Al Hudaydah. At the national level, the frequency of airstrikes has increased in February and March. In Hajjah, airstrikes have resumed, though the frequency of armed clashes has remained low.

    • No cases of COVID-19 have been reported in Yemen as of March 31. However, health system capacity including for testing is severely limited, and risk of an outbreak remains. In response to the threat, authorities in both northern and southern areas have enacted a variety of control measures, including school closures, movement restrictions across land borders (national borders and internal borders between northern and southern areas), suspended flights, and increased screening and quarantine measures at ports. No significant disruptions to trade or humanitarian operations have so far been reported. However, there remains a risk of such disruptions as screening and quarantine measures could begin to delay the movement of goods, and humanitarian organizations take actions to protect staff. This could result in reduced availability of food – including low market supply and disrupted provision of humanitarian food assistance – and generally rising food prices in many areas, further restricting food access for millions of people.

    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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