ReliefWeb

Overview

This report, drafted by ACTED, represents the findings of the third round of joint market monitoring (MM) undertaken collaboratively by ACCESS partners, Norwegian Refugee Council (NRC) and Save the Children International (SCI). The study aimed at exploring critical market networks which cover both essential goods that are necessary to ensure survival (such as food items, medicines or hygiene items) and non-essential goods that support the livelihoods of the conflict affected population (such as construction materials and agricultural inputs). This MM started in August 2017 and was intended as an iterative quarterly exercise, aimed not only at providing a snapshot of the situation at the moment of data collection, but also at measuring trends over time, in terms of access and affordability of goods on the markets as well as markets and supply chains capacities.

The report presents and analyzes the data obtained in the winter round of the study (February 2018), following mostly the same methodology as in Rounds I and II. It also looks at changes and trends affecting markets in all rounds, be they seasonal or of any other nature. The survey provides a comprehensive picture of the markets in the target area, covering 39 localities along the contact line in Luhansk and Donetsk oblasts in GCA. In contrast to the first and second round, the round 3 report also includes a snapshot picture of market centers in NGCA (Donetsk and Luhansk cities) and a comparative analysis of availability and prices of essential food and hygiene items between market sub-centers in GCA, two market centers in NGCA and Kiev. Below are the key general and market sector findings of MM survey, covering summer 2017 to winter 2018:

- General:

• High price tended to remain the main problem faced by customers in accessing all categories of goods on the markets, with proportion of respondents reporting this problem increasing from 81% in Round I to 94% in Round III.

• Basic goods (food and hygiene items) were overall fully available except in Bolotene, where the only operational shop closed in autumn 2017 so all interviewees there indicated unavailability of all goods.

• The price level was overall perceived as high across all market centers with a strong tendency for customers in larger towns (market sub-centers) to report high prices more frequently than customers in the semi-periphery and periphery.

• None of the respondents reported a general price reduction in any of the rounds of MM, although the quantitative analysis showed small reduction in price for certain commodities.

• The average increase in prices for Food/NFIs as compared with average prices reported in Round I was as follows: (1) Food + 11%, (2) Medication + 1%; (3) Coal + 20%; (4) Firewood + 32%; (5)
  Hygiene + 10%.

• No particular difficulties or bottlenecks regarding supply chains across all market sectors were detected: most retailers reported no difficulties re-supplying.

• 95% of traders across all sectors underlined selling Ukrainian products.

• In a few locations, traders reported that in kind humanitarian aid provision had negatively affected demand, notably for food and construction materials.

- Food:

• The proportion of respondents reporting price increases consistently grew since the first round.

• The food price increase trend is apparent at some level in 84% of locations where the comparison with the first round was possible.

• The most significant price increase since the first round was observed for eggs, with an average price increase of 57% comparing Round III and Round I.

• Low demand for curd cheese and vegetables was reported in the majority of peripheral markets as the local population largely grows vegetables for personal consumption and produces homemade curd cheese.

• Beef, pork and pork fat appear to be consistently in low demand in the periphery in all three rounds of MM. These products tended to be unavailable in shops/markets in at least half of locations surveyed, in all rounds of MM.

• The overall trend for lower/higher price level locations to concentrate around the same centers remained consistent for all rounds of MM, with lower price level locations concentrated around Bakhmut and Popasna, and higher price locations situated in areas around Stanytsia Lughanska and in Southern Donetsk areas near Volnovakha and Sartana.

• The majority of customers in all locations chose to purchase the cheapest food items from available items.

• Food prices were generally comparable in markets of different categories, larger centers with shorter supply chains were 3-4% cheaper than average prices;

• Dairy products, vegetables and meat products were considerably more expensive in Donetsk city (NGCA), while bread, eggs and poultry were much cheaper in both Luhansk city and Donetsk city (NGCA) than in GCA. The biggest difference in price was identified for vegetables in Luhansk city – where prices were 32% higher than the average level in GCA.

• The analysis of data on origin of supply in all rounds of MM showed that at least 82% traders are either fully or partially re-supplied from local producers from within their rayon and/or oblast.

• In all rounds of MM all interviewed food retailers reported that the food items they sell are produced in Ukraine (either locally or in other regions).

• For all commodity groups, except bread, the restocking frequency in the periphery was at least twice less frequent than in market sub-centers.

• The average price for food in Donetsk city was 7% higher than in Kiev and 2% higher than in market sub-centers in GCA; food prices were on average approximately equal in market sub-centers in GCA and Luhansk city.

- Hygiene

• Hygiene items were reported to be fully available in 100% of market sub-centers and semiperipheral localities while partial/limited availability was reported in three periphery locations (Lobacheve, Peredilske, Troitske) and unavailability reported in 1 location (Bolotene).

• The proportion of customers in market sub-centers reporting high hygiene item prices has grown from 50% in the first round of MM to 95% in the third round.

• Consistently throughout the rounds of study, the least available hygiene items are both adult and infant diapers, which are not available in at least 53% and 29% locations monitored, respectively.

• The majority of retailers selling hygiene items pointed out the steady increase in prices in all rounds of MM, however, average price appeared to remain unchanged between Round I and Round II and increased by 10% from Round II to Round III.

• Average prices for hygiene items in the periphery are 14% higher than in market sub-centers.

• Prices for NFIs (hygiene) are at 25% above average level in Donetsk city, while in Kiev they are 25% below average.

• The majority of traders reported that the most popular and sold type/brand of soap, washing powder, hygiene pads and toothpaste are not the cheapest ones.

• Around 75% of retailers re-stock hygiene NFIs from local suppliers within the Oblast.

• At least 95% retailers highlighted selling hygiene items produced in Ukraine and up to 42% retailers reported selling goods produced abroad.

• Average restocking period for the hygiene items was 8 days.

- Fuel

• Since MM round 1, in line with expected seasonal patterns, customers reported an increased availability of firewood, while the proportion of locations where either all or a part of respondents reported unavailability of firewood has decreased.

• While the overall proportion of respondents interviewed who reported unavailability of coal remained unchanged in the third round, the proportion of locations where either all or a part of respondents reported unavailability of coal decreased since Round II. Respondents in Hirske, Novhorodske and Zolote no longer reported coal to be unavailable in their locations, while all the respondents in Peredilske reported unavailability of coal in the third round of MM.

• The average price of 1 m3 of firewood reported by customers increased steadily since Round I, growing by 25% from the first to the second round and by a further 7% between round 2 and 3.

• Comparing to MM round 1 price data, the average price for 1 ton of coal reported by customers increased by 12% and 20% in Rounds II and III, respectively.

• In wintertime, the average price for coal in Luhansk GCA was 13%-14% less than in Southern and Northern Donetsk GCA.

• For the customers in the periphery and semi-periphery the cost of delivery of coal needed for winter (2-3 tons) was reportedly as high as 1,200 UAH representing 22% of total coal costs for a minimum recommended amount of coal for a full winter season.

• Local population in periphery and semi-periphery reported bad quality of coal, including that of the coal provided by humanitarian actors.

• Respondents in several peripheral locations (Chermalyk, Hranitne, Myronivskyi, Novotroitske,
  Starohnativka and Stepne) continued to report frequent illegal logging despite the risk of injury or death in the areas with high concentrations of unexploded ordnances and explosive remnants of war.

- Construction materials

• Almost one-fourth of customers interviewed (mostly in peripheral localities) reported that construction materials were not available in their location.

• Construction materials were available across the majority of locations, either immediately or on demand/order during all MM rounds. However, construction materials were reported to be fully unavailable in Bolotene, Lobacheve, Krymske, Starohnativka, Troitske and Zolote-4. Residents of these locations reported that they travel for construction materials to semi-peripheral markets or market sub-centers.

• The majority of retailers pointed out very low demand level for construction materials in winter time, especially those used for external works.

• No significant change in supply chains of construction materials was reported since the first round of MM – most of the retailers restock from within their oblast or rayon.

• At least 95% traders reported selling construction materials produced in Ukraine.

- Agricultural inputs

• The majority of retailers reported strong seasonal trends in demand for agricultural inputs, so they do not keep such goods during the winter. Stores selling agricultural inputs did not operate in winter in several peripheral locations.

• Overall, prices for all agricultural inputs are higher in market sub-centers.

• The average price increase was 4% in Round II and 7% in Round III (in relation to Round I data), although prices changes varied greatly across items.

• The proportion of traders selling agricultural inputs produced within the rayon has grown since the second round of MM.

- Medication

• Increase in price for medications was 4% in Round II and 1% in Round III.

• Customers in market sub-centers and semi-periphery reported either full or partial availability of medication noting that all the necessary medication could be purchased in local pharmacies or via Internet. In contrast, unavailability of medication was widely reported in the periphery.

- Financial institutions

• Financial institutions were fully available in market sub-centers, mostly available in semiperiphery and mostly unavailable in peripheral locations.

• Long queues were reported by respondents in the majority of locations with operational banks or ATMs.