West Africa Regional Supply and Market Outlook Update

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Preface

During the first quarter of 2018, a series of national and regional market assessments were conducted across West Africa. Key regional technical workshops were held between March and May, including the technical consultation of the Regional System for the Prevention and Management of Food Crises (PREGEC) in late March 2018 and the Annual Stocks-Info Meeting of ECOWAS’s Regional Agency for Agriculture and Food (ARAA) in early May 2018. Findings from these activities as well as FEWS NET and WFP’s regular markets monitoring serve as key inputs to this report, which provides an update to the West Africa Regional Supply and Market Outlook report published in December 2017.

Key Messages

Final West Africa cereal production data validated at the PREGEC were estimated at 67.7 million MT, down from 68.3 million forecasted following the crop assessments in November 2017. Final figures are two and half percent higher than the previous year and close to 12 percent higher than the five-year average. Cereal production decreased compared to last year in the Sahel due to erratic rainfall and dry spells.
As anticipated, supply quantities in the Sahel were below average, for the most due to reported deficits, withholding of stocks by producers, and elevated source market prices. Above average demand was also observed, further pressured by above average institutional purchases as part of the responses to the deficits. These trends translated into hampering seasonal price drops following harvest and maintained prices substantially above last year and the average especially for locally-produced coarse grains across the region.
Livestock markets are characterized by an early pastoral lean season following below-average pasture and fodder levels and continued below-average export volumes to Nigeria due to the deprecated Naira currency (NGN). This resulted in transhumance (seasonal livestock migration) four months earlier than usual and heavy de-stocking by pastoralists. Below-average price trends in most countries further depleted terms of trade.
In Nigeria, steady increased oil production and revenue have supported foreign exchange reserves (FOREX) and gradually helped bring Nigeria’s economy out of recession (NBS). Inflation rate has eased to its lowest in two years. Staple prices declined or remained stable across most markets compared to previous months and last year, but remained higher than the previous two to five-year average across the country. Prices were higher in the northeast, where market access and functioning remained hampered by persisting conflict and insecurity. NGN has stabilized, though still below by over 40 percent its previous five-year average.
Insecurity in the Sahel and the Greater Lake Chad basin remains a key factor for market and trade disruptions, population displacements, and food insecurity in the region.