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Fuel price speculation affects transportation costs and commodity prices

  • Key Message Update
  • Central African Republic
  • November 2022
Fuel price speculation affects transportation costs and commodity prices

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  • Key Messages
  • Key Messages
    • In central, western, and northwest production areas, the ongoing cassava harvest is the primary source of food and income for households. As rainfall tapes, this is helping to dry the cassava crop, the main staple food. However, due to fewer buyers, households in these areas are forced to sell their produce at prices below the seasonal average, limiting their access to other higher-priced goods and rebuilding their productive assets lost to conflict. In the east, agricultural activities in areas are disrupted by insecurity. In contrast, in the far north, areas suffered crop losses due to flooding, requiring households to rely on markets for food. As a result of high food prices, poor households are forced to limit the quantity, quality, and number of meals they eat, resulting in acute food insecurity.

    • Ongoing harvests in the relatively calm central, southwest, and western areas, have improved market supplies and slightly reduced local prices from September to October. However, the decline in fuel supplies persists, particularly in urban centers, leading to the development of informal markets where prices are double the official prices, thus negatively affecting transportation costs and consumer food prices. This situation encourages speculative practices, as traders are unwilling to offer producers better prices. However, according to the mVAM, in urban centers, resale prices in October for local agricultural products remained slightly above average, registering 17 and 14 percent for cassava and maize, respectively. In addition to increasing transport costs, the international economic situation contributes to the reduction in inflows and high prices for imported products (rice, cooking oil). The cost of rice has risen atypically, at a rate of 51 percent compared to the average.

    • Since early November, the security situation has experienced a renewal of activity by armed groups, including the resumption of armed clashes in the sub-prefectures of Ippy (center-north) and Kouango (northwest) and incidents of inter-community tension in the northwest sub-prefecture of Bocaranga. Consequently, spontaneous population movements are disrupting local markets and the delivery of humanitarian assistance. Additionally, households are abandoning fields, adversely affecting crop production.

    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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