World Food Programme. Fighting Hunger Worldwide. Monthly Price and Food Security Update Kyrgyz Republic, August 2012

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1 World Food Programme Monthly Price and Food Security Update Kyrgyz Republic, August 12 HIGHLIGHTS In August 12, the price of wheat flour increased by 10% in rural areas and 7% in urban areas on a month-on-month basis. The price was higher than the nation-wide average by 14% in Issyk-Kul oblast and 7% in Chuy oblast. This follows a 27% increase in urban areas and 23% increase in rural areas in July 12 on a month-on-month basis (prices increased by as much as 40% in some rural areas of Naryn and Jalalabad). Wheat prices increased 6% in rural areas and 5% in urban areas compared to the previous month. The average retail price of cabbage increased in August 12 by 17% in urban areas and 16% in rural areas compared to the previous month. Meat prices were stable both in rural and urban areas, while prices for milk increased 7% in rural areas and 1% in urban areas on a month-on month basis. Fuel prices remained higher in remote oblasts, particularly Batken where they were 10% higher than the nation-wide average of 38 KGS (Petrol 92). This will continue to keep the prices of some basic commodities high. WHEAT PRICES (AUGUST 12) The retail price of wheat flour continued to increase for a second month in August 12, and is now higher by 10% in rural areas and by 7% in urban areas on a month-on-month basis (Figure 1). On a year-on-year basis, the retail price of wheat flour is still lower by 15% in rural areas and by 7% in urban areas. Wheat prices increased 6% in rural areas and 5% in urban areas in August Figure 1: Retail price of wheat flour (national average, in Kyrgyz som per kg) J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A

2 GENERAL INFLATION (JULY 12) On a month-on-month basis, the Consumer Price Index increased 0.5%. The Food Price Index increased 1% (Figure 2). On a yearon-year, basis foodstuffs decreased 9% in July 12. PRICES OF OTHER BASIC COMMODITIES Figure 2: Consumer Price Index and Food Price Index Food Price Index Consumer Price Index (CPI) J M M J S N J M M J S N J M M J S N J M M J S N J M M J Figure 3: Retail price of cabbage The average retail price of cabbage increased in August 12 by 17% in urban areas and 16% in rural areas compared to the previous month. This is not usual during this period of the year and might reflect poorer harvests of such commodity (Figure 3). Meat prices remained high both in rural and urban areas while milk prices increased 7% in rural areas and 1% in urban areas on a month-on month basis. On a year-on-year basis, prices for milk went up 15% in rural areas and 6% in urban areas (Figure 4). REGIONAL DISPARITY Meat price, KGS J S N J M M J S N J M M J S N J M M J Figure 4: Retail price of meat and milk (national average, in Kyrgyz som per kg) Meat (mutton) Meat (beef) Milk J S N J M M J S N J M M J S N J M M J Milk price, KGS Retail prices of wheat flour were 14% higher than the national average in Issyk Kul oblast, 7% higher in Chuy, 9% lower than the average in Batken, and 12% lower in Talas (Figure 5). Fuel prices remained higher in Batken oblast - 10% higher than the nation-wide average of 38 KGS (Petrol 92). This will continue to keep the prices of some basic commodities high (rice, meat and sugar). Likely due to weak yields resulting from dry weather, prices for such vegetables as carrot and cabbage were the highest in Batken and Osh oblasts Figure 5: Retail price of wheat flour (August 12, in Kyrgyz som per kg) Urban Rural 2

3 INSIGHTS ON EFFECTS AT HOUSEHOLD LEVEL The latest results of the Post-distribution Monitoring (PDM) of beneficiaries of the Vulnerable Group Feeding (VGF) programme in spring 12 indicated deteriorated purchasing power compared to the two previous cycles - 58% of household budgets were spent on food compared to 55% in autumn 11 cycle and 56% in the spring 11 VGF cycle. Increasing food prices in August, particularly of wheat, will put further pressure on the already strained economic capacity of vulnerable households to purchase food. The PDM also revealed deteriorated food consumption of the surveyed households - 34% of beneficiary households had inadequate food consumption (poor and borderline) compared to a year ago (31%). Results of the monitoring of rising food prices, supported by the World Bank, will provide qualitative information on the social impacts of high food prices on households. OUTLOOK FOR THE NEXT FEW MONTHS A rise in international grain prices due to weak yields in the Russian Federation and Kazakhstan will continue influencing wheat flour prices in the Kyrgyz Republic, since it imports a quarter of its total wheat needs. In July 12 international prices of wheat rose by 23% compared to June and by 15% compared to July 11 (FAO, Global Information and Early Warning System). Further deterioration of the prospects for wheat harvests in Russia is envisaged in 12. In addition, the Kyrgyz Republic is expecting difficulties this autumn due to a % drop in the domestic grain harvest. The Government has discussed suspending the export of grain and flour for six months in response to expected shortages. Due to the abovementioned factors, domestic wheat flour prices will continue to be under pressure and close monitoring is required. Fuel prices are likely to remain higher in southern oblasts such as Batken, Osh and Jalalabad, which will be reflected in the prices of such basic commodities as wheat, flour and cooking oil. WFP IN THE KYRGYZ REPUBLIC WFP's VVGF programme is supporting the most vulnerable people in the country by providing fortified staple foods to fill calorific and micronutrient needs as well as help ease the burden of increasing expenditures for basic food. The Food for Assets Programme helps communities to rehabilitate rural infrastructure such as irrigation canals, run-off ponds and roads to achieve sustainable agricultural production and improve communities' resilience to natural disasters and high food prices. WFP also supports the country in strengthening the domestic system for monitoring food security in order to better predict and respond to food insecurity in an efficient, timely manner. The project is supported by the European Union. 3

4 PRICES OF BASIC COMMODITIES IN RURAL AND URBAN MARKETS Retail prices of basic commodities were monitored on a monthly basis in selected urban and rural markets in all oblasts (provinces) in the country. The latest retail prices are compared against the price in previous month, 3 months ago and 1 year ago.

5 Contact: United Nations World Food Programme Country Office in Kyrgyz Republic Vulnerability Analysis and Mapping Unit 2

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