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Price controls favor household food access until the next harvest

  • Remote Monitoring Report
  • Senegal
  • June 2013
Price controls favor household food access until the next harvest

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  • Key Messages
  • Projected Outlook through October 2013
  • Key Messages
    • Weather forecasts are predicting normal to above-normal rainfall activity in all parts of the country and the 2013 agricultural season is starting up with the distribution of government-subsidized farm inputs. To-date, however, early rainfall amounts in the southern part of the country have been below-average.

    • Terms of trade for peanuts/rice and livestock/cereal, which have improved since March and compared to last year, and the institution of government price controls for rice, the main dietary staple, should help keep food insecurity at Minimal levels (IPC Phase 1) between now and the end of September, until the next harvest. The expected average harvest will further bolster food security.

    ZONECURRENT ANOMALIESPROJECTED ANOMALIES
    National

    The government has reduced peanut seed subsidies for the 2013-2014 growing season by 100 CFAF/kg following strong sales prices for peanuts this year.

    Price increases for peanut straw (30 percent) and animal feed (40 percent) compared to average have driven price increases for slaughter animals since March.

    The smaller subsidy will limit the size of planted areas by poor farmers, who will be paying double last year’s price for seeds.

     

    The imminent new pasture growth expected with July rains will reduce reliance on animal feed, and help moderate future livestock price increases. The upward movement in prices will be sustained by the improved physical condition of livestock and the heavy demand engendered by the month-long observance of Ramadan in July-August.

     


    Projected Outlook through October 2013

    Rainfall forecasting centers (ACMAD and Agrhymet) are predicting average to above-average rainfall activity for the 2013 season, and the first rains are already falling in the eastern and southern parts of the country. Rainfall levels are nearaverage but below levels during the same period in 2012. These early rains mark the start of the new growing season, for which the government is subsidizing the cost of fertilizer and seeds in spite of budget cuts of approximately 30 percent since last year. According to the peanut farmers cooperative, cuts in these subsidies are raising concerns over a possible reduction in the size of areas planted in crops by poor households in peanut-producing regions, as the price of peanut seeds doubling from 100 to 200 CFAF/kg. Deliveries of farm inputs in general and peanut seeds in particular are on track, with coverage levels at 76 percent in farming areas like Kolda and 60 percent in Ziguinchor, allowing for a timely start-ofseason and favoring good harvest.

    The large trader inventories of broken rice (the staple food of choice) and government price control measures that reduce rice prices by 15 percent are promoting household access to this highly consumed staple until the next harvest in October. These measures, which also include oil and sugar, whose prices were cut by 100 XOF/liter and 25 XOF/kg, respectively, will bring relief to most households, particularly during the lean season and month-long observance of Ramadan starting in July. Prices for these items should remain at lower levels with the strict monitoring measures promised by the government and the stabilization of rice prices on the international market. 

    The fairly good supply of cereal crops from rural markets in production zones is sustaining supplies of millet and sorghum on retail markets. Prices are down by one to 14 percent from last month and from the same time last year, except in the case of millet, whose price is four to seven percent higher. However, prices for sorghum and imported maize are still above the five-year average by two percent and 14 percent, respectively. 

    Market supplies of imported rice from large trader stocks-on-hand. Are plentiful. Prices for broken rice on markets across the country are down from April with the price-cutting measures imposed by the government. More specifically, prices are below the five-year average by one percent and down from April and from May of last year by two percent. In general, average levels of household income are helping to ensure relatively good staple food access. 

    The ongoing average local rice harvest in the Senegal River Valley is helping to improve market supplies. Combined with government price controls, these good rice supplies are helping to give most households better-than-average cereal access. The increasing price of unshelled peanuts since last November in peanut-producing areas has helped improve the purchasing power of local peanut farmers, boosting terms of trade (for peanuts/rice) by 30 percent over the last 12 months (WFP). The stabilization of peanut prices since November at levels 24 percent above-average is sustaining the good food access of rural households. 

    Livestock supplies on assembly markets will continue to tighten with the usual seasonal migration to rainy season grazing areas and the steady reduction in imports from Mali. This, combined with the high consumer demand for meat during Ramadan, will help sustain the upward movement in prices for beef cattle between June and October.

    Crop planting activities will continue with ongoing distributions of subsidized farm inputs and the expected rains in late June. Anticipated crop sales in June by farmers looking to meet their financial needs for the current growing season will help keep market supplies at acceptable levels. However, high demand during the month-long observance of Ramadan will put added pressure on markets and, in all likelihood, will cause July prices to rise. Households across the country are expected to maintain Minimal acute food insecurity (IPC Phase 1) between now and the next harvest in October of this year, driven by good food access, normal levels of seasonal income, and good pastoral conditions.

    Figures Typical seasonal calendar

    Figure 1

    Typical seasonal calendar

    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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