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Yemen Key Message Update: Despite measures to support imports, significantly elevated food prices expected to rise further, May 2022

Countries
Yemen
Sources
FEWS NET
Publication date
Origin
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Key Messages

  • The wheat export ban announced by India on May 14 aggravated concerns for the stability of Yemen’s food supply due to the country’s high dependence on imports. However, India’s late May decision to exclude Yemen from the ban will likely allow Yemeni importers to secure the required quantities of wheat grain, though some uncertainty exists. Due to limited storage capacity of existing silos at both Aden and Al Hudaydah ports—which does not exceed 20 percent of Yemen's annual consumption requirements—strategic stockpiles cannot be meaningfully increased, raising the vulnerability of the national food supply to further global supply and price shocks.

  • From March to April 2022, the Yemeni Rial (YER) appreciated by 23 percent and 7 percent in Aden and Sana’a city, respectively, according to data from WFP. This is likely linked to the early April formation of the Presidential Leadership Council and announcement of a planned 3 billion USD Gulf financial aid package. However, Yemeni households and traders continue to lose faith in short-lived appreciation of the YER, and traders do not decrease food prices in proportion to recovery of the currency. Given this and rising global wheat prices in April, wheat flour prices decreased by only 6 percent in Aden in and increased by 11 percent in Sana’a city. On aggregate, prices of wheat grain, wheat flour, rice, sugar, and oil declined by 4 percent on average in Aden city and remained relatively stable in Sana’a city. More recently, as of May 29, key informants report that prices of subsidized bread increased by 25 percent (from 30 YER/bread to 40 YER/bread) in Aden.

  • On May 16, an agreement between the Kingdom of Saudi Arabia (KSA) and Yemen was signed to extend the previous KSA deposit and transfer the last batch of 174 million USD to the Central Bank of Yemen in Aden. Following this, the amount of foreign currency auctioned on May 24, 2022, was increased by 50 percent, from 20 million to 30 million USD, likely to cover increased hard currency requirements for imports.

  • Prices of basic food commodities remain significantly above average and continue to increase overall. Given limited income-earning opportunities and eroded coping capacity, food is becoming increasingly unaffordable for many poor households. Access to food is expected to be decreasing again following recent slight improvements during Ramadan and Eid in April and early May. Throughout the projection period through September, millions of poor people are likely to face food consumption gaps nationwide, with Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!) outcomes expected to remain widespread. Populations of highest concern include urban households with irregular sources of income and households in lowland areas during the ongoing agricultural off-season, given high dependence on markets for food.

  • According to the Food Security and Agriculture Cluster (FSAC) of Yemen, the value of emergency food assistance cash transfers was increased as of May 1, 2022, to keep up with the rising cost of the Minimum Food Basket (MFB). Transfer values were increased to 65,000 YER/household/month (equivalent to 109 USD/household/month) in areas controlled by the Sana’a-based authorities (SBA) and to 122,500 YER/household/month (equivalent to 106 USD/household/month) in areas controlled by the internationally-recognized government (IRG).[1] This will likely improve food access for many beneficiaries given rising food prices. Meanwhile and according to feedback from humanitarian partners, the in-kind and voucher MFB composition—which is equivalent to approximately 80-85 percent of kilocalorie needs of a household of seven—was also adjusted to replace 25 kg of wheat flour with 20 kg of rice, subject to beneficiaries’ preferences.

[1] These values are based on a household size of seven and are adjusted depending on the actual household size.