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Marketing conditions returning to normal in the north; decreased demand in the south

  • Food Security Outlook Update
  • Mali
  • June 2013
Marketing conditions returning to normal in the north; decreased demand in the south

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  • Key Messages
  • Market Conditions and Trends
  • Current Situation
  • Outlook
  • Key Messages
    • Cumulative rainfall totals for the period from May 1st through June 20th were generally normal to above-normal.  Crop planting was slightly delayed by localized late June rains, particularly in structurally-deficit southern Kayes and western Koulikoro. 

    • Increased trade with normal supply areas  in the south and accelerated humanitarian assistance have considerably improved staple food availability in  northern markets, though import flows from Algeria are still limited. Exceptions include localized pastoral areas such as Ber (Timbuktu) and Anefif (Kidal), where persistent security problems continue to delay the recovery of market activities. Northern pastoral populations are still facing IPC Phase 3: Crisis levels of food insecurity.

    • Persistent weak demand in southern production markets triggered unusual price decreases between May and June, ahead of the onset of the lean season in agropastoral zones. The same trend is reported by rice-growing farmers in the Timbuktu region given the absence of usual buyers and ongoing food assistance.

    • The food security outlook for the southern part of the country is average to good and is starting to improve in the north with the various humanitarian programs underway, gradual economic recovery, and seasonal improvement in pastoral conditions. IPC Phase 3: Crisis levels will continue in the north until the anticipated improvement in pastoral conditions and the acceleration of humanitarian assistance in August. 


    Market Conditions and Trends

    The marketing system in northern Mali has adapted to realities on the ground since large-scale military activities were launched in March 2012. The relative isolation of northern areas, pillaging of food supplies, and disruptions to normal supply channels for basic commodities jointly contributed to atypical price increases—particularly the height of the shortages in March 2012. Market supplies resumed via routes through Niger in June of last year, while informal Algerian imports helped improve food supplies for populations affected by the conflict-related breakdown of economic activity.

    Seasonal increase in river traffic during this period also helped improve food supply after major roads were closed between the north and south and along the Algerian border in January, with the launch of the new military campaign. In the northern part of the country, livestock markets were disrupted, resulting in reduced demand and prices. This reduced pastoral incomes, particularly in the pastoral areas of Timbuktu and Gao and the Kidal region.  

    Market response since February 2013

    The clearing of mines and gradual reopening of major northern roads in February of this year helped bolster trade flows between northern and southern Mali and encouraged the recovery of market activities, particularly in the riverbelt area of Timbuktu and Gao. The increase in road and river traffic in March 2013 and resumption of humanitarian assistance efforts helped drive down cereals prices. The adoption of the preliminary peace agreement by the government and the MNLA in mid-June is helping to restore mobility—particularly in Kidal. Trade between Algeria and Gao, which had been sharply reduced, has rebounded since February and contributed to improved market supplies.

    Cereal prices began to decrease from their December/January levels beginning in February 2013 with the lifting of restrictions on trade and the acceleration in cereal flows. Livestock prices have increased with the slow but steady rebound in demand, increasing terms of trade for goats/millet in Timbuktu and Gao. Livestock marketing activities remain very limited in some pastoral areas like Djeboock and Tin Aouker (in Gao), and Ber, Bambara, and Maoudé (in Timbuktu), compared with more dynamic markets in secure urban and riverbelt areas. Persistent insecurity due to conflict between armed factions in the Kidal area continues to hinder the recovery of activities in some markets (Halil). Localized reduced livestock sales in some pastoral areas have led some pastoralists to travel to cross-border markets in Niger to sell their livestock and purchase staple food supplies. Reliance on cash and in-kind remittances from relatives outside the area and their focus on food purchases to the exclusion of all other types of spending have helped sustain pastoral households. 


    Current Situation

    With the approaching end of the lean season in pastoral areas and the beginning of the lean season in agropastoral areas in July, food security is marked by good cereal availability at stable prices in the south and by accelerated humanitarian food assistance and the gradual resumption of more typical socioeconomic conditions in the north. 

    Seasonal progress

    Weather forecasts by ACMAD and NOAA predict normal to above-normal rainfall activity in Mali. The timely start of the rains in the south also signals the onset of the new growing season in some areas. Delayed June rains are responsible for the slight delay in the planting of crops in the southern reaches of Kayes, Mopti, and Ségou-- which is not of significant concern this early in the season.  Preparations for the start of season in the south are already underway and the implementation of government subsidies for farm inputs should give most farmers across the country good access to inputs. Current activities include planting, weeding, and transporting fertilizer. These activities are a regular source of food and income for poor households all across the country at this time of year. Returning migrant workers currently bolster household purchasing power with their migration income and through their contributions to household on-farm labor supply. Farming activities in the north are just starting, including crop maintenance for off-season rice crops, bund maintenance in irrigated rice-farming schemes, and flood-recession crop planting. Scattered light rainfall in northern areas of the country is helping to spur new pasture growth, crucial to improve livestock body conditions and milk production.  

    Situation in the south

    In general, cereal availability on supply markets in southern Mali in the weeks leading up to the lean season in agropastoral areas is average to good.  Supply is bolstered, as usual, by ongoing harvests of off-season crops and crop sales by farmers to meet their financial needs for the new growing season. Traders reportedly have larger than usual inventories and are making necessary corrections to bring their supplies in line with weak demand. The main causes are last season’s good harvest, distributions of humanitarian food assistance, and insecurity in the north. Southern markets are currently feeling the effects of reduced demand, with certain markets reporting unusual drops in cereal prices compared to normal seasonal price trends. Humanitarian food and nonfood assistance efforts are helping to improve food security for an estimated 353,455 displaced persons and host households in the south. Part of these food supplies, pulses in particular, are resold to make other necessary purchases. Food security and market conditions in the south remain generally normal, while the regional and cross-border market system is marked by the following anomalies and trends: 

    • Cereal trade has rebounded since March of this year with the improvement in security conditions and the return of IDPs. Supplies on these markets are average. Markets in northern Mali are normally supplied by traders in San, Macina, and Niono.  Cereal trade has improved as security conditions stabilize and increasing numbers of IDPs return home. Millet prices are unchanged from last month and are comparable to the average in Mopti and slightly below-average in Ségou and San. Exports to Mauritania from Léré and Goundam have been disrupted, while increased exports to Niger is encouraging traders to increase trade flows in that direction without significantly affecting local markets.
    • Staple food prices are falling in spite of the approaching lean season in agropastoral areas: The unexpected stabilization or decline in prices for millet, sorghum, maize, and rice on certain production markets at this time of year means less income for traders than usual, but assures affordable prices for poor households. This is attributed to larger than average village-level food stocks and food distribution programs underway in structurally deficit areas-- making households less dependent on typical lean-season source markets. Moreover, harvests of off-season rice crops and additional crop sales by farmers in May/June to cover their expenses for the new growing season will help boost market supplies, sustaining current market trends. This will hurt the incomes of traders and farmers, but is working to the advantage of consumers in these last weeks before the start of the lean season. With facilitated food access, consumers are able to maintain stability and pursue normal seasonal activities.
    • Larger than usual volume of cereal exports to Niger: This year’s larger than usual exports of millet to Niger are beneficial to traders looking for sales opportunities. There are at least three or four 40 MT trucks heading from San to Niger each week, compared with the usual one to two trucks. This increased export demand is driven by favorable prices in Mali compared with prices on markets in Niger, which are feeling the effects of the poor 2013 harvest and restricted trade flows from Nigeria.
    Situation in the north

    The improvement in security conditions and eased mobility in conflict areas are sustaining the urban and rural market recovery, which began in March and has continued to gain momentum in May. On the other hand, pastoralists in nomadic areas of Kidal and the Timbuktu and Gao regions, far from these more secure urban areas, are still affected by residual insecurity, which is hampering local recovery and humanitarian operations in these areas. In general, cereal supplies on major markets in Timbuktu and Gao are average to good, while supplies on the Kidal market are low. Prices for millet and rice are unchanged or down from May, inconsistent with normal price trends. Still, millet prices are above the five-year average by 27 percent in Timbuktu and by five percent in Gao, where the supply of food assistance is allowing traders make exports to Niger without significantly affecting local markets. 

    The re-establishment of relative stability in the far north (in Kidal and nomadic areas) since April has supported a slow rebound in economic activities (primarily trade, transportation, and wage labor). The large concentration of troops in this area has helped further stimulate the economy, specifically by boosting livestock prices in urban areas, where they are approximately 15 to 25 percent above-average. However, business on the Tarkint, Menaka (Gao), Lerneb, Ber (Timbuktu), Aguelhok, and Anefif (Kidal) markets, which are extremely important to the livestock trade in pastoral areas, has been slow since March of last year. Attendance at markets in Kidal by Algerian wholesalers is down sharply, where the only livestock for sale are small animals. In addition, the disruption of northern markets continues to severely hamper the operation of trade networks.

    • Food prices, which had been trending downwards, are unchanged or increasing compared to last month. Prices for rice and wheat semolina are 10 to 20 percent above-average and terms of trade for goats/millet are fluctuating at levels five to 10 percent above the five-year average. However,  poor market access of nomadic pastoralists continues to limit sales and food supplies.
    • Limited numbers of buyers on livestock markets in pastoral areas is affecting the income of nomadic pastoralists. This is due to the reluctance of traders from riverbelt areas and Algeria to venture into pastoral areas, considered centers of conflict/instability. Pastoralists fearing reprisals are heading down to markets in the Valley. Pastoralists in Gao and Timbuktu are traveling to cross-border markets in Niger and Burkina Faso and smaller numbers of pastoralists in Kidal are heading to Algeria in an attempt to limit the negative effects of this situation. These long treks are hurting the market value of their animals due to the severe degradation in grazing and watering conditions at this time of year.  
    • Distributions of food and nonfood assistance by the Red Cross and WFP continue in refugee camps on the Algerian border and settlement sites in Kidal. These operations are enabling recipients to meet their food needs without resorting to harmful coping strategies. Humanitarian assistance activities have recently been extended to the entire area, as the military becomes involved in the distribution of food rations. Prices in areas heavily targeted by food assistance are somewhat volatile with the decreasing demand and growing supply of affordable foodstuffs on local markets, particularly for millet and rice.

    In general, major markets in northern pastoral and agropastoral riverbelt areas (Timbuktu, Gao, Ansongo, and Bourem) operate on regular market days with the gradual return to relative stability and return of local populations and governments. However, the presence of wholesale livestock traders is still lower than usual.

    • Lean season livestock prices that are five to 20 percent higher than average are helping to raise the incomes of pastoralists in the Valley. Increasing livestock prices are a result of the low supply of animals due to poor market attendance by nomadic pastoralists. Thus, prices for animals from the Valley, sustained mainly by bourgou grass and crop residues, are getting to be relatively expensive. The large livestock markets in Ansongo, Wabaria, and Gossi are being frequented by increasing numbers of wholesalers from Niger.
    • The slump in rice sales with the reduced demand and a large supply of imported rice from distributions of food assistance continues to affect farmer income in the riverbelt area of Timbuktu. Prices in Diré and Timbuktu are 15 and 10 percent below-average, respectively, which is hurting the incomes of farmers in need of liquidity to meet their expenses for the new growing season. There are reportedly over 23,000 MT of unsold paddy rice in the storerooms of cooperatives operating irrigated rice-farming schemes in Timbuktu, according to the findings by the review meeting organized by the Chamber of Agriculture this past month to discuss the problem of poor rice sales in the Boucle du Niger and Office du Niger areas.    

    Outlook
    • Weather forecasts are predicting an increase in rainfall activity, which should encourage crop planting activities in areas where rainfall has been delayed or is slightly below average. Crops in the southern part of the country should make normal progress. Households in southern Mali should continue to experience Minimal food insecurity (IPC Phase 1) with the good cereal availability in that part of the country, bolstered by scheduled June harvests of off-season rice crops in the Office du Niger area and a number of irrigation schemes (Pleine de San-Ouest, OPIB, and ODRS).
    • Southern markets will continue to be well-stocked with supplies between now and the next round of harvests. Cereal prices will stabilize with the tightening of supplies from farmers in response to the below-average rainfall marking the start-of-season. The mobilization of large on-farm and trader inventories in August with the expected good progress of the growing season could help bring down market prices sooner than usual.
    • The flow of food commodities to nomadic pastoral areas, particularly with Gao, is expected to improve over the next few months. The adoption of the preliminary peace accord and the arrival of the U. N. Stabilization Mission in Mali in July should facilitate these improvements. Food security will improve as of July, with the growth of fresh pasture helping to boost milk production. The improvement in security should accelerate humanitarian assistance and the opening of livestock markets to wholesalers. However, northern pastoral populations will continue to face IPC Phase 3: Crisis levels of food insecurity between now and August.
    • The rapid market recovery in the riverbelt area beginning in March will continue in the months ahead, particularly with the resumption of financial services by local banks with the expected improvement in security conditions and imminent return of government officials to the north. There will be a further improvement in cereal supplies as of July with the resumption of river transportation service. Trading and related activities will gradually rebound, spurred by the normalization of socioeconomic conditions, furnishing households with income to meet their food needs.
    Figures Typical seasonal calendar

    Figure 1

    Typical seasonal calendar

    Source: FEWS NET

    Figure 1  Current food security outcomes for June 2013

    Figure 2

    Figure 1 Current food security outcomes for June 2013

    Source: FEWS NET

    Figure 3:  Trends in trade flows compared to normal

    Figure 3

    Figure 3: Trends in trade flows compared to normal

    Source: FEWS NET

    Figure 4 : Terms of trade for millet/goats on urban markets

    Figure 4

    Figure 4 : Terms of trade for millet/goats on urban markets

    Source: SAP, FEWS NET

    Figure 5: Trends in rice prices in urban markets

    Figure 5

    Figure 5: Trends in rice prices in urban markets

    Source: SAP, FEWS NET

    This Food Security Outlook Update provides an 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 over the next six months. Learn more here.

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