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Above-average prices are driving weak purchasing power, impacting household food access negatively

Above-average prices are driving weak purchasing power, impacting household food access negatively

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  • Key Messages
  • OUTLOOK BY COUNTRY
  • EVENTS THAT MIGHT CHANGE THE OUTLOOK
  • Key Messages
    • Many poor households across the region are facing Crisis (IPC Phase 3) outcomes during the lean season as households are market reliant with below-average purchasing power. The situation is most concerning in southern Madagascar, where humanitarian assistance drives Crisis! (IPC Phase 3!) outcomes, but Emergency (IPC Phase 4) outcomes are likely in the absence of ongoing humanitarian assistance that is currently funded through January 2023. In southern and extreme northern parts of Zimbabwe, southern parts of Malawi, Angola, Lesotho, and southern and northern Mozambique, lower than normal access to food stocks and income due to prolonged dry spells during the 2022 season, conflict, and high prices are likely to drive Crisis (IPC Phase 3) outcomes until the start of the harvest in March 2023. 

    • The start of the 2022/23 agriculture season in March 2023 is expected to improve agricultural labor opportunities across most of the region. However, labor wages for poor households will likely trend below average due to increased competition and lower-than-normal liquidity for better-off households. Poor households are expected to engage in on and off–farm casual labor activities through February to earn income to purchase staple foods at markets. The start of the green harvest in March, followed by the main harvest in April and May, will improve food availability and access for most households, with very poor and poor households likely to earn income from harvest labor opportunities.

    • Conflict remains a key driver of food insecurity in Cabo Delgado, Mozambique, and most of eastern DRC. Since September, militia attacks have increased in Cabo Delgado and neighboring parts of Nampula province as insurgents seek access to food and resources. In the DRC, there have been increased attacks by the M23 rebels in the eastern region. While the East African community has reinforced military personnel and equipment in Goma, the M23 rebel group will likely increase violent activities. In Ituri and North Kivu, the conflict has also been escalating. Crisis (IPC Phase 3) outcomes are expected through March for all conflict-affected areas of DRC and Mozambique. However, the worst-affected poor households in DRC's Rwanguba and Jomba in Rutshuru territory and Drodro and Mangala in Djugu territory are likely facing Emergency (IPC Phase 4) outcomes due to a lack of access to food and income.

    • Staple food prices in the region's most acutely food insecure areas are above the five-year average and expected to increase through the lean season. In Mozambique, DRC, Zimbabwe, Lesotho, and Angola, maize grain prices in most monitored markets in September are up to 50 percent above the five-year average, while in Malawi, prices increased to over 130 percent above the five-year average. Increases in fuel prices are resulting in surging transportation costs, driving increases in staple food prices across the region. Localized market supplies have also declined due to increased market demand, as most poor households exhausted their food stocks before September. Price increases are expected to continue through March until the start of the 2023 harvest in most countries, driving below-average household purchasing power. 

    OUTLOOK BY COUNTRY

    Democratic Republic of the Congo 

    • In addition to the limited participation of households in the agricultural season due to the combined effects of insecurity and population movements throughout the north-eastern zone of the country, agricultural season A experiences below-normal rainfall, suggesting a less successful agricultural season with expected below-normal harvests from January.
    • With the announced arrival of troops from the countries of the East African community, to reinforce the Armed Forces of the Democratic Republic of Congo (FARDC), an escalation of violence is expected. An increased level of violence and new displacements of people from conflict areas are likely, adding to the 5.5 million already displaced in the eastern part of the country. These households are likely to abandon their livelihood activities, lose their typical sources of income and food, and have limited participation in upcoming agricultural seasons.
    • The provinces of Ituri and North Kivu, in a context of escalating conflicts, will evolve with increasingly significant deficits in food consumption and will remain in a Crisis situation (IPC Phase 3) with the possibility of some health zones, such as Rwanguba and Jomba in Rutshuru territory and Drodro and Mangala in Djugu territory, have a subset of populations in Emergency (IPC Phase 4). The stable part of the center-north remains Minimal (IPC Phase 1), with areas of Stressed (IPC Phase 2) in the center-east, where households will face minimally adequate food consumption.

    To learn more, see the October 2022 Democratic Republic of Congo Food Security Outlook

    Madagascar

    • In southern Madagascar, a third consecutive season of drought and below-average harvests continue to drive Crisis (IPC Phase 3) and Stressed (IPC Phase 2) outcomes. In several areas, significant levels of humanitarian food assistance are expected to prevent worse outcomes through January 2023, indicative of Crisis! (IPC Phase 3!) and Stressed! (IPC Phase 2!). Currently, however, humanitarian assistance plans are funded only through January, even though February and March are the peak of the lean season period when market prices are typically at their highest and income levels are at their lowest. If assistance levels are not sustained, then households in these areas will most likely face widening food consumption gaps and consequently engage in unsustainable coping strategies. In the absence of assistance, Emergency (IPC Phase 4) and Crisis (IPC phase 3) outcomes are expected across the Grand South from February to mid-April, when access to food will improve with the harvest.
    • Along the coast of eastern Madagascar, where cassava production was negatively impacted by excess moisture and flooding during the 2022 cyclone season, households are experiencing Stressed (IPC Phase 2) outcomes, with pockets of households experiencing Crisis (IPC Phase 3) given the lengthy nature of recovery. These outcomes are anticipated to persist throughout the outlook period. In the rest of the country, near-average crop production and near-normal household incomes will continue to drive Minimal (IPC Phase 1) area-level outcomes through May 2023; however, an increase in the number of households facing Stressed (IPC Phase 2) outcomes is likely given the negative effects of high inflation on access to food.
    • Following a deceleration in inflation from July 2021 to June 2022, headline inflation has been rising again since July, climbing to 9.7 percent year-on-year in September 2022, which is the highest inflation rate recorded since January 2018. The increase in inflation is driven by high fuel and transportation costs as well as high food prices, reflecting international prices as well as domestic damage to crops caused by weather events, such as cyclones and drought. The increasing inflation is eroding households' purchasing power and limiting access to food. In addition, these trends are limiting economic recovery from the impacts of the COVID-19 pandemic and reducing middle and better-off households' ability to hire labor.
    • The beginning of the agricultural season is expected to improve labor opportunities starting in November as households begin land preparation and planting activities. Initial rainfall data for October indicate an average start to the rainy season in southern Madagascar, with projections for a continuation of average rainfall for the remainder of the agricultural season. While this is expected to facilitate an increase in cultivation as compared to last year, labor opportunities and harvests are likely to remain below average following consecutive years of drought, limited seed stock and access to agricultural inputs, as well as soaring inflation eroding middle and better-off households' hiring power.

    To learn more, see the October 2022 Madagascar Food Security Outlook

    Malawi

    • Although favorable harvests in much of northern and central Malawi resulted in an increase in national crop production this year compared to the five-year average, tropical storms and dry spells resulted in significant crop losses in much of southern Malawi and some central districts. In the worst-affected areas, many households in the very poor and poor wealth groups reported low to negligible cereal and cash crop harvests from the main harvest ending in August. The reduction not only directly affected food and income from crops and crop sales, but also significantly diminished agricultural labor income. At the same time, high inflation linked to weaker export revenues, high global food and fuel prices, and the devaluation of the Malawi Kwacha in May are further constraining household access to food for both rural and urban populations. These shocks are expected to drive Stressed (IPC Phase 2) and Crisis (IPC Phase 3) outcomes throughout the October 2022 to May 2023 outlook period.
    • FEWS NET conducted field assessments in several livelihood zones of concern in southern Malawi in September. In the worst-affected areas, such as Machinga district, FEWS NET observed that many poor households are subsisting on limited income from sales of natural resources and migratory labor by other family members that traveled to Mozambique, while consuming only one-to-two meals per day. In some cases, households are resorting to consuming foods such as maize husks. Based on outcome analysis using the Household Economy Approach and other available evidence, typical food and income sources are insufficient to prevent widening food consumption gaps among poor households as the November to March lean season progresses.
    • To mitigate the potential for worsening acute food insecurity during the lean season, the government and humanitarian partners plan to deliver humanitarian food assistance beginning in November. Based on currently available plans, deliveries will likely cover household kilocalorie needs for three to five months, ending in April when the next harvest begins. In southern and central districts where planned levels of assistance are significant enough to prevent food consumption gaps, FEWS NET assesses Minimal! (IPC Phase 1!) and Stressed! (IPC Phase 2!) outcomes are most likely. However, in some districts, the level and timing of food assistance is unlikely to be sufficient relative to the scale of need and Crisis (IPC Phase 3) outcomes will likely persist.
    • Based on global, regional, and local weather forecasts, Malawi will most likely receive below-normal rainfall in the northern half of the country and above-average rainfall in the southern half of the country. Episodic weather events such as mid-season dry spells and flooding in low-lying areas are possible. Southern Malawi's Middle Shire, Lower Shire, and Phalombe Lake Chilwa Plain livelihood zones commonly suffer from both dry spells and flooding, while lowland areas along the shores of lake Malawi and across the country typically experience flooding. While the 2022/23 harvest is expected to be average on the national level, these episodic weather events – coupled with reduced financial access to key agricultural inputs such as fertilizer – are expected to result in a third-consecutive below-average harvest in the south.

    To learn more, see the October 2022 Malawi Food Security Outlook

    Mozambique

    • In October, most rural households face Minimal (IPC Phase 1) outcomes, supported by their food stocks and food purchases. However, Stressed (IPC Phase 2) outcomes persist in areas recovering from natural disasters. In drought-affected areas of southern and central Mozambique, cyclone/storm-affected areas in Nampula province, and conflict-affected areas of Cabo Delgado, Crisis (IPC Phase 3) outcomes persist as households' food stocks are diminished following a significantly below-average 2022 harvest. In Cabo Delgado, areas receiving humanitarian assistance are likely Stressed! (IPC Phase 2!). With a forecast average rainy season, acute food insecurity is expected to improve to Stressed (IPC Phase 2) and Minimal (IPC Phase 1) across much of Mozambique as households access the 2023 harvest in March/April 2023.
    • In August and September, the Food Security Cluster (FSC) partners provided humanitarian food assistance to just over 1 million people in northern Mozambique. Due to funding constraints and increased need, WFP continues to distribute half rations equivalent to 39 percent of daily kilocalories through January 2023. Additionally, WFP is continuing to conduct a vulnerability-based targeting exercise to prioritize assistance according to vulnerability status instead of displacement. In October, WFP began providing humanitarian food assistance to more than 22,500 people in the drought-affected areas, complemented by the distribution of agricultural kits to boost food production during the 2022/2023 agricultural season.
    • The forecast average rainy season is likely to support average crop production for the 2022/2023 agricultural season across most of Mozambique. However, from January to March 2023, there is an increased risk of flooding across most river basins in central and southern Mozambique. To reduce the risk of flooding, the Pequenos Libombos, Massingir, and Cahora Bassa dam authorities are gradually increasing discharges to build retention capacity to accommodate upstream flows through the upcoming rainy season.
    • In September 2022, maize grain prices increased or remained stable in most monitored markets. Following seasonal trends, prices increased 9 to 13 percent in Mocuba, Massinga, Manica, and Lichinga while remaining relatively stable across other monitored markets. However, maize prices fell another 10 percent in the Mutarara market as the market stabilizes after prices doubled in July. Compared to the five-year average, maize grain prices in September are 11 to 47 percent above the five-year average in most monitored markets but 5 to 16 percent below the five-year average in Lichinga, Mocuba, and Montepuez. The above-average trend in maize grain prices in most markets across the country is likely driven by the cumulative effect of successive price increases over the past four years, following multiple production shocks, including cyclones, floods, and below-average rainfall. Maize meal and rice prices remained stable from August to September 2022 in all monitored markets but had a mixed trend compared to 2021 and the five-year average.   

    To learn more, see the October 2022 Mozambique Food Security Outlook

     Zimbabwe

    • In typical deficit-producing areas in the south, east, west, and far north, Crisis (IPC Phase 3) outcomes are expected to persist throughout the lean season into early 2023 due to depleted own-produced foods and limited access to markets. However, surplus-producing areas, which produced relatively better 2022 harvests, are expected to see the communal areas remain Stressed (IPC Phase 2), while the resettlement areas, which also had significant 2021 carryover stocks, experience Minimal (IPC Phase 1) outcomes throughout the lean season. Across all parts of the country, improved outcomes are expected with the start of harvests in April/May 2023. Urban areas are expected to be Stressed (IPC Phase 2) as poorer households only afford minimal basic food but not other food and non-food needs.
    • Most of the country – except for the far north – started receiving significant rainfall in early November. Land preparation intensified, and some farmers started planting slightly earlier than normal. However, other farmers had yet to access agricultural inputs for the season or preferred to hold off on planting until the rains fully established. By the end of November, over half of the planned crop inputs to be provided by the government had reportedly been distributed. With rainfall resuming at the end of the month following some mid-month dryness, planting increased across much of the country.
    • In November, prices of most basic food and other non-food items remained stable, in line with the trend in the last few months. However, the government did not extend the 6-month duty-free policy for imports of prioritized basic food and other commodities. This policy expired in mid-November, and its expiration may lead to increased prices of some basic commodities. In addition, maize meal imports were suspended at the end of the month as the government seeks to protect local millers against cheap imports, which may negatively impact some poorer households reliant on cheaper imported maize meal, especially in southern areas. However, maize grain imports by the private sector remain permissible, and national-level impacts to maize meal prices are unlikely.
    • As the rainfall season sets in, on-farm-based casual labor opportunities are gradually improving. However, water and pasture conditions will take time to see improvements, resulting in livestock (mainly cattle) conditions remaining mainly fair to poor, especially in typical arid areas. Cash and in-kind remittance flows are expected to increase during the holiday season through the end of the year, though they will likely remain below normal. The sale of seasonal domestic and wild fruits and other produce is expected at near-normal levels, providing another source of income for households engaged in this activity

    To learn more, see the October 2022 Zimbabwe Food Security Outlook

    Countries Monitored Remotely [i]

    Angola

    • A normal seasonal onset of rains has occurred and Minimal (IPC Phase 1) outcomes are expected to continue across most of the country from November 2022 to January 2023. As the lean season begins, many households have nearly depleted their own production and are relying more on markets for food purchases, which is typical for this time of the year. The increased demand on market supplies is starting to put upward pressure on food prices. The release of more rice, beans, wheat, and corn flour by the Strategic Food Reserve (REA) is planned to help contain the prices of basic foodstuff. There are reports that traders are acquiring products in Luanda and selling to markets in Benguela, Huambo, and Lubango since food prices in Luanda continue to be lower than those in central and western provinces.
    • Most poor households in southwestern areas are engaging in petty trade since many have not returned from livestock migration and few are available to tend to the fields. Some available household members are continuing field preparation activities, and some are engaging in weeding the fields of other farmers. Households continue to intensify their livelihood strategies in order to minimize food consumption deficits. Some households continue to gather wild fruit, produce alcoholic beverages for sale, and participate in occasional day labor. As the lean season progresses, Crisis (IPC Phase 3) outcomes are expected to continue, with acute food insecurity improving slightly in January as some households begin to access horticultural harvests and from March to May 2023, during the main harvest period in the southwest. November is the final month of humanitarian food assistance distributions by the WFP in Cunene and Huila. 
    • After a timely start to the seasonal rains across most of the country, the 2022/23 agricultural season is under way. Updated forecast indicates a high likelihood of below-average rainfall in parts of western Angola, which are typically high production areas. In comparison to the 18-year mean, preliminary data for October and November indicates that rainfall is underperforming in a few areas in the west. In the southwest, remote sensing data indicates that rainfall amounts are near the amounts for the 2021/22 season and the 18-year average, but anecdotal reports indicate that soil moisture levels are below average. On the ground, there are still reports that many agro-pastoral households have yet to return to their homesteads in time to plant for the 2022/23 agricultural season. Additionally, other factors including decreased access to seed and fertilizer may impact area planted this season. Crop conditions in the west and southwest will need to be monitored closely over the next several months.
    • Headline inflation continues to follow a downward trend, decreasing from 21.4 percent in July 2022 to 16.68 percent in November 2022. During this same five month period, the value of the kwanza to the USD has declined by 20 percent ($424 USD to $509 USD). Though the annual inflation rate is declining, domestic prices keep rising albeit at a slower monthly inflation rate. In October, the prices of national and imported products increased by 1.84 percent and 0.88 percent, respectively.

    To learn more, see the October 2022 Angola Remote Monitoring Report

    Lesotho

    • Crisis (IPC Phase 3) outcomes are ongoing as the lean season begins, household food stocks from own production are depleted, and market reliance increases. While imports from South Africa are available and support normal market supply, high food prices and below-average income continues to drive low purchasing power and limit households' access to food. Crisis (IPC Phase 3) outcomes will be observed throughout the lean season.
    • Above-average rainfall is expected across Lesotho between October 2022 and April 2023. The beginning of the agricultural season is expected to improve agricultural labor opportunities, with on-farm labor opportunities increasing from November onwards throughout the 2022/23 rainy season.
    • According to the National Bureau of Statistics, the annual inflation rate in September was 9.2 percent, similar to August and remaining somewhat elevated. Food and fuel price increases primarily drive the high inflation rate. Food prices were generally stable in Maseru between August and September. Despite this stability, maize meal prices were nearly 10 percent higher than at the same time last year and almost 30 percent above the five-year average. In comparison, wheat prices were almost 20 percent higher than in 2021 and nearly 45 percent above the five-year average. The above-average prices limit household access to food by reducing household purchasing power. 

    To learn more, see the October 2022 Lesotho Remote Monitoring Report

     

    [i] With remote monitoring, an analyst typically works from a nearby regional office, relying on a network of partners for data. Compared to countries above, where FEWS NET has a local office, reporting on remote monitoring countries may offer less detail.

    EVENTS THAT MIGHT CHANGE THE OUTLOOK

    Possible events over the next eight months that could change the most-likely scenario. 

    AreaEventImpact on food security outcomes

    Southern Africa

    Cyclones Strikes

    Increase in cyclones between January and March will likely cause flooding in Madagascar, Malawi, Mozambique, and Zimbabwe. Crop losses due to these cyclones will reduce production prospects for affected countries in southern Africa.

    In addition, increased cyclone activities will likely cause infrastructural destruction causing both human displacements and health and sanitation problems that may trigger disease outbreaks like cholera. 

     

    Figures

    Source : FEWS NET

    To project food security outcomes, FEWS NET develops a set of assumptions about likely events, their effects, and the probable responses of various actors. FEWS NET analyzes these assumptions in the context of current conditions and local livelihoods to arrive at a most likely scenario for the coming eight months. Learn more here.

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