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Speculative behavior in response to COVID-19 drives rising staple food prices

  • Remote Monitoring Report
  • Central African Republic
  • April 2020
Speculative behavior in response to COVID-19 drives rising staple food prices

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  • Key Messages
  • Key Messages
    • Speculative trading related to COVID-19 movement restrictions are exacerbating the long-term trend of high food prices, which have prevailed since the start of the main harvest in late 2019. High food prices are negatively affecting food access among poor households across the country, especially in areas where humanitarian access is difficult. Internally displaced people (IDP) and host households in conflict-affected areas are most likely to face Crisis (IPC Phase 3) outcomes through September.

    • Although border closures exempt cross-border trade in essential commodities, health and cargo screening procedures are leading to a reduction and slowdown in food commodity trade flows. Consequently, local market supply in several products is lower than normal, which is driving the increase in food prices. There is concern that this trend will worsen the typical disruptions to trade flows and market supply that occur during the rainy season.

    • Perennial crops and wild foods are expected to continue to prevent more severe food security outcomes, in addition to irregular access to food assistance among IDP and host households located at displacement sites. The start of the small harvest in July and start of the main green harvest in September, which are expected to remain below pre-conflict levels but above the five-year average, will also contribute to improved food availability during the June to September period.





    To limit the spread of COVID-19, the government of CAR has implemented some movement restrictions, including the closure of schools and bars and a ban on gatherings exceeding 15 people, including on public transportation. The CAR-Cameroon border is closed, though trade in essential commodities is exempt.

    Staple food prices continue to trend higher than 2019. Traders are reportedly engaging in speculative pricing practices, due to concerns about the indirect impacts of COVID-19 on market supply. Traders report a slowdown in imported goods from Cameroon and slowdown in trade flows between cities.

    MINSUCA has suspended non-essential movements to minimize the risk of transmission of COVID-19 but remains active in insecure areas. In early 2020, conflict events are mainly being reported in northern CAR – including in Vakaga, Haute-Kotto, and Bamingui-Bangoran prefectures. These events continue to displace populations, disrupt market functioning, and disrupt household livelihood activities. From January to April, more than 30,000 IDPs were registered, bringing the total IDP population to 702,000 (OCHA, April 2020). 

    Although there is uncertainty regarding the trajectory of COVID-19 cases in CAR, it is assumed that the number of cases will increase. To limit the spread, it is assumed the government of CAR will maintain current movement restrictions in the near-term. However, it is also assumed that the government has limited capacity to enforce more severe movement restrictions.

    Staple food prices are expected to remain above last year until the harvest in August/September, based on low market supply during the lean season, speculative trading behavior, and disruptions to trade flows during the main rainy season. Trade flows are expected to continue between Cameroon and CAR and within CAR, but with delays.

    Movement restrictions are not likely to affect rural households’ engagement in the 2020 planting season. Transhumant livestock movements are expected to be fairly normal due to porous borders.

    Although seasonal forecasts indicate average to above-average rainfall from June to September, agricultural production in 2020 is likely to remain below pre-conflict levels due to conflict in some localities. Production is also likely to be limited by a reduced household income to spend on agricultural inputs due to higher spending on food purchases at the market. The ongoing cassava disease is also expected to affect perennial cassava yields. However, due to the relative improvement in security nationally, production is likely to be above the five-year average. 


    As of April 29th, the WHO has confirmed 42 cases of COVID-19 within CAR. According to the Ministry of Health and Population’s assessment in the Coronavirus Preparedness and Response Plan that it developed with WHO and UNICEF, CAR is highly vulnerable to the spread of COVID-19 due to its porous borders, weak surveillance and case management capacity, and the population’s low access to water and sanitation services (UNICEF, April 2020). Bangui prefectures in the southwest, including Ombella Mpoko, Lobaye, Nana-Mambere, and Mambere-Kadei, are considered particularly high risk.

    Although the government has imposed some movement restrictions in order to limit the spread, most urban and rural livelihood activities are not directly affected. According to key informants, however, the restrictions imposed on public transportation have driven up the cost of taxi, bus, or motorcycle rides by more than 60 percent. Further, although trade in food commodities is formally exempt from cross-border movement restrictions, health checks for truck drivers and transporters, lengthier border screening procedures, and loading delays at the port of Douala in Cameroon is resulting in longer delivery times and some reduction in food trade. For example, supplies deliveries that previously occurred twice per week from Cameroon (which supplies the bulk of CAR’s imported goods) have dropped to once per week. Other markets in the country rely on imported goods that enter and are redistributed from Bangui, where supplies are low compared to normal.

    As a result, the main indirect impact of the COVID-19 pandemic is currently a worsening trend of high staple food prices. Prior to the onset of the pandemic, staple food prices were already high despite above-average national production in 2019, due to local crop losses caused by the 2019 floods, cassava crop losses from high cassava disease incidence, and crop losses between January and March resulting from transhumance movements. These factors negatively affected both household and market supply, resulting in an early start to the lean season in March. Now, speculative trader behavior due to COVID-19 is contributing to atypical price increases compared to last year. In April, among imported products, the price of rice rose by 80 percent while the price of beans and oil rose by 50 and 30 percent, respectively, on average across key reference markets. Among local products, the price of maize and cassava rose by 40 percent and the price of sorghum rose by 60 percent on average. The markets of Bangui, Ndélé, Berberati and Zemio have witnessed the highest price increases. In Bangui, market supply is low at the same time that households are relying on food purchases more than usual, while in Zemio, Berberati, and Ndélé, high transport costs are also an issue. In Ndélé, market functioning has recently been affected by armed group activity.

    Since humanitarian cargo and food assistance delivery are exempt from movement restrictions, this has yet to significantly disrupt WFP’s delivery of food assistance. In February, WFP delivered 2,509 mt of food assistance and USD 1.3 million in cash assistance to 544,396 beneficiaries. In March, food assistance likely continued at similar levels but distribution data is unavailable. Preliminary information from WFP indicates food assistance has been provided to IDP and host households as well as victims of house fires in the sub-prefectures of Alindao, Mobaye, Obo, Birao, Ndélé and Bria. According to WFP, planned food assistance from May to August is expected to reach at least 25 percent of the population in Vakaga, Haute-Kotto, Nana-Gribizi, Bamingui-Bangoran, and Haut-Mbomou prefectures. However, armed group activity and deterioration in road conditions during the rainy season are likely to periodically disrupt food assistance delivery. There is also concern for potential reductions in operational capacity due to the indirect effect of COVID-19. WFP has specifically noted challenges in pre-positioning food in Birao (Vakaga) prior to the start of the rainy season due to ongoing violence.

    In summary, Crisis (IPC Phase 3) is most likely to persist through September among IDP and host households in conflict-affected areas, where insecurity periodically disrupts access to food and income sources and food access is declining due to low market supply and atypically high food prices. However, many poor households are expanding their reliance on wild food gathering and hunting, particularly where the armed groups are active: Vakaga, Bamingui-Bangoran, Haute-Kotto, Basse-Kotto, Haut-Mbomou and Mbomou. Irregular food assistance and the availability of wild food are expected to prevent large food consumption gaps, though food consumption is expected to be lowest at the peak of the lean season in July/August. Some poor households in Bangui and the surrounding area are also expected to be in Crisis (IPC Phase 3), particularly those who had already lost livelihood assets during the 2019 floods. Household purchasing power is below normal due to low market supply of staple foods and atypically high staple food prices, while the cost of transportation to access markets or livelihood activities is above normal. According to key informants, the urban poor and the rural poor in these areas are already reducing the number of meals consumed per day from two to one.

    An increase in the Stressed (IPC Phase 2) population is expected through September in central and southern prefectures, where households are dependent on trade flows from the capital for local market supplies and high food prices are negatively affecting food access. In these areas and in western agricultural production areas, however, the availability of perennial crops, the start of the maize and groundnut harvest in July, and start of the green main harvest in September are expected to prevent more severe food security outcomes.

    Figures Rainy season is from April through June in the south and from July through September in the North. Planting is from April thr

    Figure 1

    Figure 1

    Source: FEWS NET

    In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

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