Chad Market Analysis Summary

• The government has estimated a significant cereal self-sufficiency deficit, with barriers to cross-border flows this year. Despite these developments, market supply, even in net consumption zones in the Sahel, is generally good.

• Cereal prices have increased 20-43 percent in general compared to the five-year average. Given the rise in labor prices, the high price levels did not affect access to food in January-February.

• Poor and very poor households will be in Phase 2: IPC stress starting in April through June, and in Phase 3: IPC crisis from July to September (Figures 1-3). Technically appropriate and well-targeted assistance will be necessary in order to save lives between July and September.

Problem of Cereal Self-Sufficiency and Demand

Cereal production from the 2011-2012 agro-pastoral season is estimated at 1,620,000 tons, almost 15 percent less than the average. The gross cereal self-sufficiency deficit is estimated at 625,000 tons relative to consumption requirements. Despite the cereal deficit, markets are operating normally to transfer cereal from surplus zones to deficit zones.

The gross national cereal deficit does not incorporate reserves carried over, which are typically estimated at approximately 60,000 tons (based on 2008/09 as average). In 2011/12, reserves carried over were significantly larger than usual due to record production in 2010/11. 

The gross cereal self-sufficiency deficit also does not incorporate imports of approximately 45,000 commercial tons (without significant informal imports) in a typical year and 10,000 tons in food assistance (not including WFP assistance of 120,800 tons).

The cereal self-sufficiency deficit is more accentuated than usual in the north band of the Sahel. The cereals most affected by decreased production are millet and sorghum and the areas most affected by the deficit are Ouaddaï, Wadi Fira, Guera, Batha, Kanem and Bahr El Gazal. Household reserves are low in the Central Agropastoral zone and Eastern Rain-fed Cereals and Market Gardening zone and only cover an average of 3-4 months of consumption since the harvest, compared to 7-8 months in a typical year. Consumption from 2011/2012 production of poor households in the Eastern Rain-fed Cereals and Market Gardening zone may last only 1-3 months compared to 1-5 months, and for the Central Agro-pastoral zone, 1-2 months compared to 1-2 months during a typical year, according to the profiles of these zones.

Cereal Supply

The current level of commercial reserves is at least typical, even better compared to the 2009/10 level, a year of poor agricultural production in the Sahel. Current cereal reserves are generally normal in southern markets; oilseed reserves are higher than average, especially in Pont Carol due the Nigerian border closing.

In the Sudan surplus zone in the south of the country, dry cereal supply is average as producers and traders who maintained reserves at the beginning of the 2011-2012 commercial season.

In the Sahel zone, dry cereals now come from the Guéra and Salamat (for millet and sorghum) and corn from the Lac region. In addition, the expected availability of declining crops will not be good enough to significantly improve market supply compared to average production years.

At the end of 2011, National Food Security Office (ONASA) reserves were about 45,000 tons, higher than the average. In early January 2012, authorities decided to sell half of the ONASA reserve at subsidized prices in all regions of the country. The remaining reserve is close to 24,918 tons as of January 2012, similar to the typical peak level of ONASA reserves.

In 2012, subsidized sales of the ONASA reserve in all regions without respect for appropriate timing or more precise targeting of poor households is a considered a premature measure and may reduce response capacity during the lean period. The quantity distributed is low and may have a minimum impact on prices.

Flows

Internal cereal flows from the south to the north are almost normal with large quantities on the markets; supply sources are the same compared to a normal year. For millet, which is transferred from Moundou and Koumra to N’Djamena, and sorghum (from Mayo Kebbi to N’Djamena), an intensification of North-South flows has been observed due to a higher than usual demand for dry cereals in the Sahel zone. Strong pressure on demand is evident on markets in Salamat, Mandoul, Guera, Mayo Kebbi and Lac, and an early and atypical presence of buyers from Wadi Fira, Ouaddaï, Batha, Guéra and Barh El Gazel has been observed on markets in Salamat.

Cross-border flows are not at their usual levels. Due to the measure taken unilaterally by the Nigerian government to close its borders with Chad at the end of December 2011, livestock (ruminants and donkeys) flows to Nigeria are dropping as are flows for oilseed and legume crops (groundnuts, sesame, cowpeas), and cakes due to the closure of the border which is more restrictive for Chad than for Niger. Exchanges with Libya (camel and rice exports, flour and pasta imports) are in progress, but lower than pre-war levels and related to internal security problems. Exports of pearl millet to Sudan are higher than normal, particularly from the Adé, Goz-Beida and Hadjer Hadid zone.

Prices

So far in 2011/12, there has been no sign of price control by the government.[1] Cereal prices recorded an increase at the usual time of harvest (September/October-December) due to high production costs (re-sowing several times, increased labor costs), one to two month harvest delays, and low producer supply. Generally, millet prices are currently 20 to 43 percent higher compared to the average. Prices are not as high in Abéché (8 percent compared to the average) and are higher in Moundou (70 percent). This current price level corresponds to the peak level (August) in a lean period. Despite high levels, poor households accessed food in January.

According to seasonal price trends, an increase might be moderate or might even stabilize in February and March and then begin again from April through August 2012. Price stability, which is highly likely, is due to corn and dry season sorghum harvests expected in February and March. Price increases beginning in April will threaten to change market conditions, triggering a lean period earlier than expected. Cereal price increases in surplus zones beginning in April will be reflected in higher prices in Sahelien deficit zones, especially in Abéché, Moussoro and Mongo, and by a food access deficit of poor households in deficit zones, especially those in the Eastern Rain-fed Cereals and Market Gardening zone.

Pastoral Context

According to pastoral surveys conducted in November-December, the availability of pasture and water for livestock, although lower than the average, is better than in 2009/10. Transhumant herders left for areas in the South and the Lac region as early as November and December 2011 instead of in January-February in a typical year. This early departure in the southern region (Mandoul) caused prices to drop, especially for small animals on some southern markets (e.g., Peni). The supply of small animal increases on markets in the South given food access issues experienced by herders as a result of increased cereal prices. With the forced slaughter of hogs (due to the African hog epidemic in 2011), small animal sales for annual expenditures such as schooling is higher than usual.

The overall livestock supply is good on all markets, especially for large animals, which have a presence on markets that is almost equivalent to last year. Demand, on the other hand, is very low and for now is coming from the capital. Flows to Nigeria (for cattle) and to Libya (for camels) are much slower due to the closure of the Nigerian border and the unstable security situation in Libya.

Terms of trade between sheep and millet are influenced by increasing supply of small animals on markets in the South, with food access issues faced by pastoralists due to fodder deficits and increased cereal prices. The terms of trade for sheep and millet in January 2012 (average of 168 kg/sheep) are favorable to pastoralists and agro-pastoralists selling sheep is relatively similar to levels in January 2010 and 2011. These households will not face significant constraints to increasing food access during the first quarter of 2012, and it is more likely that terms of trade will deteriorate from March to June.  This timeframe coincides with the depletion of food stocks in poor households, a more sustained increase in cereal prices, the change in meat and milk production, and a gradual decrease in the availability of employment opportunities. Millet prices might be affected with the start of the lean period beginning in June-July.

Areas of Concern

Localized, below-average agricultural and pastoral production in the Eastern Rain-fed Cereals and Market Gardening zone, in the south of the Transhumance Zone and in the north of the Agropastoral Zone, is causing an increase in already high market dependency, but at higher prices. Between April-August/September, income-generating opportunities will be limited depending on the performance of the season. For these reasons, the need for urgent assistance is concentrated among households, especially the very poor, during this period in these areas of the Sahel. A field mission will be undertaken in March to extend further analysis to these areas.

In the Eastern Rain-fed Cereals and Market Gardening zone, poor and very poor farming households are the most affected and the market constitutes the principal source of food consumption.

In a normal year, the principal food sources of poor households is their own harvest, primarily millet and sorghum and then corn, which meets  15 to 40 percent of food requirements in an average year.  Produced food is supplemented by market purchase. Rain-fed cereal production in the 2011/12 season was approximately 25-70 percent lower than the five-year average in the Eastern Rain-fed Cereal and market gardening Zone. In Mangalmé, localized cereal production was reported to be 20 to 30 percent of the average. Harvest forecasts for market farming and root vegetable crops are not much better. Out-of-season corn from Lac, harvested from the cold season, is expected between the end of March and the beginning of April and may temporarily replenish local supply in the zone. The high market dependency of the poor and payments in kind to meet basic food needs leaves these households particularly vulnerable to food price increases.

During the harvest and post-harvest period (September-December 2011), millet prices in the cereal zone started to increase by approximately 13 percent. On the Abéché market, prices in January were almost 20 percent above the five year average.

Some households migrated to Salamat starting in December to sell their labor during the dry season sorghum harvest. Labor prices increased from 2,000 to 2,500 XAF/day in October 2011 through January 2012 (compared to 1,500 in 2010). As a result of the higher number of laborers who arrived earlier than usual from other departments (Biltine, Mangalmé, etc.) compared to prior years, the number of work days and the price of labor is at risk of decreasing in the near term. 

Deterioration in the terms of trade, labor prices, and cereal prices will be seen, due to the gradual depletion of food sources and income in future months; however, this is contrary to the Sudan zone where all of the currently adopted coping strategies are typical for the period.

An increase in the rate of global severe malnutrition (GSM) in the zone over future months could occur due to food access constraints facing poor households.   To mitigate the impact of the current price increase and its potential consequences during the lean period, the following response strategies are planned and financed, and are probable:

• Regular food assistance to 240,000 Sudanese refugees and almost 180,000 internally displaced persons in eastern Chad by WFP with a ration of more than 1,770 Kcal per person per day. Russia also delivered 1,400 tons of wheat to refugees during the first week of February as part of this assistance;
• Provision of periodic seed rations to host populations in the aforementioned areas;
• The mobilization of 24,000 tons of strategic food reserves by the Government and its partners for subsidized sale to vulnerable populations between June-August;
• Strengthening the productive capacity of vulnerable producers in May-June through donations of market farming seeds, agricultural tools and phyto-sanitary products by the FAO , and
• Periodic actions (donations of rain-fed seeds) to vulnerable producers within the scope of the National Food Security Program

The zone benefited from the sale of cereals at subsidized prices implemented by the government in January.