ETHIOPIA MONTHLY MARKET WATCH

Transcription

1 Highlights The year-on-year overall country level inflation and food inflation rate increased by 29.84% and 36.64%. Cereal inflation rate rose by 45.8%. Local maize and wheat price at Addis Ababa stood below the import parity respectively by 45% and 6%. However, sorghum stood above the import parity by 24%. In, the nominal wholesale price of maize wheat and sorghum across all monitored markets remained stable compared to the preceding month but stood above the level of five years monthly average ( ), 2008 and last year the same month. The high price level of sorghum in agro pastoral areas of monitored markets (Turmi and Karati) coupled with failure of Belg in the SNNP region affects their purchasing power and hence household food security. The terms of trade between shoat and maize at Gode and Jijiga improved as compared to March. Inflation and Consumer Price Index The overall country level inflation and food inflation rate increased by 29.84% and 36.64% respectively as compared to The non - food inflation increased by 19.67%. The components of food index showed increases as compared to similar month last year; cereal (45.8%), pulse (46.1%), bread and other prepared food (35.9%), meat (90.5%), milk, cheese and eggs (34.6%), oils and fats (10.2%), potatoes, other tubers and stems (40.2%), other food items (12.3%) and food taken away from home (33.6%). Major Cereal Import Parity and Local Prices The import parity price of maize (Durban) at Addis Ababa stood at US$ 608/mt, at US$ 478/mt for wheat (Europe) and at US$ 426/mt for sorghum (Argentina). The import parity prices at Addis Ababa remained stable for these cereal with slight decreases; maize (4%), wheat (1%) and sorghum (2%). Local maize and wheat price at Addis Ababa stood below the import parity respectively by 45% and 6%. However, sorghum stood above the import parity by 24%. Despite local maize price stood below the import parity, availability of the commodity in the market and purchase restriction from open market by humanitarian organizations is another factor to be considered. Cereal Wholesale Prices in Large Urban Markets In the last three months, unseasonably the price of cereal was increasing. In, the nominal wholesale price of maize, wheat and sorghum across all monitored markets remained stable compared to the preceding month. However, the average price level in all monitored markets stood above the level of five years monthly average ( ), 2008 and last year the same month (see Page 1 of 5

2 Table 1, Figure 1, and Figure 2). The stability at the current higher level might be associated with increased supply by farmers in the preparation of Meher season plantings, the distribution of subsidized wheat, the festivity of Easter holiday and other factors that contributed to improved supply to markets. Despite high level of the price, this situation can be considered as favorable if continued in the next months which are less likely. The lowest and highest price of maize was observed at Nekempt (Birr 4.25/kg) and Dire Dawa (Birr 5.50/kg). Fig 1: National average wheat price (Birr/kg) Fig 2: National average maize price (Birr/kg) Source: Ethiopian Grain Trade Enterprise Source: Ethiopian Grain Trade Enterprise Cereal Retail Prices in District Markets Generally, maize, wheat, sorghum and Barely () retail price stood the same level of March. However, there are markets that showed higher price changes either directions by 10% and above: maize at Gode ( 25%), Sikela ( 10%); wheat price at Yabelo ( 12%), Nefas Mewcha ( 16%); sorghum price at Turmi ( 51%), Karati ( 31%), Dire Dawa ( 19%), Gode ( 17%), May Tsebri ( 13%) and Babile ( 10%). On the other hand, decline in price of maize and wheat lower than 10% was seen at Hawasa, Yabelo, Wukro,Ginir, Aleta Wendo and Dila markets. The high price level of sorghum in pastoral and agro - pastoral areas of monitored markets (Turmi and Karati) coupled with failure of Belg in the SNNP region affects their purchasing power and hence household food security. Trend of cereal price in selected markets is indicated on Figure 3 and Figure 4. Fig 3: Sorghum price at Turmi (Birr/kg) Fig 3: Maize price at Gode (Birr/kg) As a consequence of Belg season failure and as the lean season approaches in Meher dependent areas (June September), price increases of staple cereal will be expected that will affect the Page 2 of 5

3 food security of poor and very poor community group that disproportionately spend their income on food expenditure. In some areas, PSNP transfer is switched from cash to food ( June) and it reduces market dependence of programme beneficiaries and as a result price of cereal in these markets may not increase dramatically. Supply to Markets In Ethiopia, the majority grain supply to the market is sourced from local production; except import by food processing factories and humanitarian food aid. Since the 2008 food price spike, the Government has imported wheat grain for distribution at subsidized price to the urban consumers as parts of market stabilization mechanism. In most of the monitored markets, the supply of grain to the markets is below the expected of the season, particularly in Belg producing areas of SNNP region. In SNNP Belg producing areas root crop (sweet potatoes) and haricot bean are major foods consumed at this time of the year and due to failure of Belg rainfall, no supply of these food items are available. In peak marketing season (Jan ), the supply of grain to the market was below normal that kept the price to rose immediately after harvest. There is high suspect that farmers supplied to markets little by little with expectation of further price increases and also to compensate increased agricultural inputs price. Terms of Trade (TOT) TOT for shoat to cereal: The average price of shoat rose at Jijiga by 5%, Gode by 2% and remained the same at Dire Dawa compared to a month ago. Following decreased price at Gode, the terms of trade increased by: 36% between shoat to maize and 22% between shoat to sorghum. The increased terms of trade at Jijiga is attributed to slight shoat price increases and stability of cereal while at Dire Dawa no changes observed. The terms of trade between shoat to maize stood at 145kg/shoat both at Gode and Jijiga while stood at 1.42kg/shoat at Dire Dawa (see Table 1 and Figure 5). If pastoralists receive the higher proportion of shoat selling price, their purchasing power will be improved. Otherwise it is the local collectors who benefits through buying at low price from pastoralists and sell to traders in major markets like Gode and Jijiga. TOT for wage labour to cereal: Compared to 2011, the monthly average wage rate (skilled and unskilled) rose by 19% at Amhara while remained stable in monitored markets of and regions. The increased wage rate and stability of cereal price in Amhara and as well decreased average price of cereal in monitored markets contributed to the improvements of terms of trade between: wage to maize and wage to sorghum (see Table 1). Owing to the availability of work, labor dependent households have improved access of cereal from markets. Infrastructures construction both by Government in many places as well private business in major urban centers have created high demand of daily workers. Hence, many labor dependent households are working in major urban centers during agricultural slack season to support household income. The daily average wage in monitored markets stood at Birr 48 in Amhara, at Birr 53 in and at Birr 70 in. The average terms of trade between wage to maize and maize stood at 10.50kg/day at, at 8.85kg/day in Amhara and 8.5 kg/wage in (see Table 1 and Figure 6). Page 3 of 5

4 Figure 5: Trends of TOT (100kgs of maize/shoat) Figure 6: Trends of TOT (kg of maize/daily wage) Page 4 of 5

5 1Y 1M SNNPR Amhara Oromia Table 1. Market Watch on Main Food Commodities in Selected Monitored Markets Markets Major Comm Current ce change (%) Avarage Change 4. Current Retail Price (BIRR/100KG) Curren change (%) Avarage Change 4Y 1Y 1 M 4Y 1Y 1 M Regions Zone Market Major Comm 5Y 1Y 1 M 5Y 1Y 1 M 1.Local Wholesale and Import Parity Price (USD/MT) E.HaragheBabile Maize Addis Ababa Maize Sorghum Wheat Bedeno Maize Sorghum Bedessa Maize Teff white Deder Maize Teff mixed Bale Guradamol Wheat Teff red Borena Yabelo Maize Nazrath Maize Wheat Wheat Arisi Merti Sorghum Sorghum Maize Teff white Kersa Wheat Teff mixed S.Wollo Ebinet Sorghum Teff red N.Wollo Mota Wheat Maize blank N.Wollo Kobo Maize Dire Dawa Wheat blank Sekota Sorghum Sorghum blank Oromya Bati Maize Teff white S. Korem Barley Teff mixed E. Wukro Wheat Teff red N.Wollo Barley Import Parity Price Maize C. Abi Adi Wheat Wheat Sorghum Sorghum Maize Wholesale Price (BIRR/100KG) 5Y 1Y 1M 5Y 1Y 1M S.Omo Turmi Sorghum Addis Ababa Maize Guraghe Meskan Maize Wheat K.TembarHosaena Maize Sorghum Gedio Dila Maize Ambo Maize Wolaita Sodo Maize Wheat Jijjiga Jijjiga Sorghum Gonder Maize Maize Ziway Maize Wheat Dire Dawa Wheat Gode Gode Maize Jimma Maize Milk (Birr/Litre) Price 1Y 1M Nekempt Maize Gode Gode Milk Mekele Maize Jijjiga Jijjiga Milk Wheat Liben Dolo Ado Milk No Data Sorghum Markets Price change (%) Avarage Change Nazareth Maize Y 1Y 1 M 5Y 1Y 1 M Wheat Livestock-Shoat (BIRR/Shoat*) Shashemene Maize Jijiga Jijiga Shoat Wheat Gode Gode Shoat Bale Robe Wheat Dire Dawa Shoat Bure Maize Terms of Trade Number of Quintal per Shoat Jijiga wheat /Shoat Hossana Maize maize /Shoat Wheat Gode maize /Shoat Baher Dar Maize maize/shoat Dire DawaDire Dawa Assela Wheat wheat /Shoat R emark: P rices increase above normal price fluctuation 8.Average casual labour wage per day (BIRR/Day) 3YRS 1Y 1M 3Y 1Y 1M N o rmal P rice F luctuatio n P rice decrease belo w no rmal price fluctuatio n Exchange rate applied Amhara P rice fluctuatio n is co nsidered no rmal if the price change is within 5% fo r I mo nth; within 15% fo r 1 year; 1M =C o mpared to M arch 1Y=C o mpared to A pril Y/ 5Y=C o mpared to 4 o r 5 years mo nthly average Major Comm Curren t Price 9. Terms of Trade Number of Quintal per Shoat Amhara kg maize/wage kg wheat/wage kg wheat/wage kg maize/wage Page 5 of 5