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Somalia Market Update: March 2020 Upate (Issued April 17, 2020 )

Countries
Somalia
Sources
FSNAU
Publication date
Origin
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Highlights

Inflation:

SoSh (Somali Shilling)-using areas: Consumer Price Index (CPI) remained relatively stable or changed mildly (by +/- less than 2%)) in March 2020 compared to the previous month in SoSh using regions of central, northeast and southern Somalia. Compared to the five-year average (2015-2019), CPI increased at mild to moderate levels in central (3%) and northeast and (13%) regions but decreased moderately in the southern regions (8%) due to relatively lower cereal red sorghum prices in southern Somalia this year.
SISh (Somaliland Shilling)-using areas: CPI remained relatively stable compared to one month ago but declined mildly (3%) compared to the five-year average due to decreases in cereal prices this year.

Exchange rate:

SoSh-using areas: The exchange rates between SoSh and the United States Dollar (USD) remained relatively stable in all regions of the country in March 2020. Compared to the five-year average (2015-2019), SoSh exhibited depreciation (8-33%) in all SoShusing regions of the country with the highest depreciation noted in the northeast due to continuous printing of local currency notes in this region in recent years.

SISh-using areas: the exchange rate between SISh and USD exhibited relative stability in March 2020 compared to both one month ago and the five-year average (2015-2019).

Local cereal (white maize, red sorghum and white sorghum) prices mostly decreased (by less than 10%) in March 2020 compared to February 2020 across Somalia as the 2019 Deyr harvest and recent off-season production continue entering into the markets. This is consistent with normal seasonal trends. However, compared to the five-year average (2015-2019), cereal prices were higher (3-18%) in most of the regions due to relatively higher local cereal prices this year.

Prices of imported food (rice, sugar, vegetable oil, wheat flour) were mostly stable or exhibited mild monthly changes by (less than +/- 4%) in local currency terms in March 2020 compared to the February 2020 in south-central regions. Northern regions recorded slight increases (3-6%) during March. As of early April, prices of imported commodities have started increasing due to the combined impact of ‘panic buying’ by consumers and speculative behavior and suppy distruptions related to the COVID-19 pandemic. Compared to the five-year average (2015-2019) prices of imported food itesms mostly exhibited mild to moderate increases (3-23%) in southern, central and northeast regions for most food imports. Similarly, in Northwest regions, prices of most imports exhibited mild to moderate increases (8-18%) against five year average, attributable to higher prices this year.

Livestock prices for local quality goat and camel mostly exhibited mild monthly changes (by less than +/- 5%) in March 2020 in most regions of the country. Compared to five-year average (2015-2019) livestock prices were higher (by 4-37 %) across all regions of the country due to improved body conditions as a result of improved availability of pasture and water. Milk prices mostly exhibited mild to moderate increases (by 2-13%) in most regions compared to February 2020 due to seasonal decline as lactating goat dried up and reduced milk yield for lactating camel . Compared to the five-year average (2015-2019), milk prices (camel and cattle) are mostly lower (5-25% in most regions of the country due to increased milk availability this year as a result of medium calving in most regions including from private dairy farms in and around some major urban centers.

Labor (unskilled) wages exhibited relative stability/mild monthly changes (by less than +/-3%) in March 2020 in most regions of Somalia with the exception of Shabelle regions where labor wages declined moderately (by 16%) due to reduced labor opportunities as a result of the deteriorating security situation in the region. Compared to the five-year average (2015-2019), labor wages exhibited mild to moderate increases in all regions, attributable to relative improvement in agricultural employment opportunities this year.

Terms of Trade (ToT) between daily labor wage and cereals either remained relatively stable or changed mildly (by +/- 1-2kgs/daily wage) in most regions of the country in March 2020 except in Shabelle regions where the TOT declined by 20 percent attributable to reduced wage labor as mentioned above. Compared to the five-year average, ToT between daily labor and cereals in Shabelle and Juba Valleys decreased (by 6-9%) attributable to reduced labor opportunities as a result of the civil insecurity (active conflict) this year.

Similarly, the ToT between local quality goat and cereals exhibited mild monthly changes (by less than +/-10%) in most regions of the country except Juba Valley that recorded an increase of 16 percent due to increased goat prices and reduced cereal prices. Compared to the five-year average, the ToT between goat and cereals was higher in most regions due to higher goat prices this year.

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