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East Africa

Prices of coarse grains on the increase and at high levels in most countries of the subregion

12/05/2020

In several countries of the subregion, the disruption of marketing and trade activities and panic-buying related to the COVID-19 pandemic continued to exacerbate grain price increases in April, in markets already underpinned above their year-earlier levels by the below-average 2019 cereal outputs and difficult macro-economic conditions. In Uganda, prices of maize continued to increase in April and at faster rates than in March, with seasonal pressure compounded by panic buying and market disruptions following the implementation of lockdown measures to limit the spread of the pandemic. Demand from the Government for its distribution programmes also provided upward pressure. Prices in April were well above their year-earlier levels, sustained by a below-average 2019 cereal production and large exports in the past months. In South Sudan, prices of cereals surged in April in the capital, Juba, due to panic buying and disruption to cross-border trade flows and markets related to the pandemic. Overall, prices of cereals in April were at exceptionally high levels, mainly due to the difficult macro-economic situation, inadequate domestic supplies and the lingering impact of the prolonged conflict. In the Sudan, prices of sorghum and millet continued to increase steeply in April and reached record highs. Stronger domestic buying and disruptions in market supplies amid the pandemic added to the upward pressure provided by a recent strong depreciation of the country’s currency. However, prices of sorghum increased at slower rates than in March, as a recently introduced export ban improved domestic availabilities. The exceptionally high level of prices is due to a poor 2019 harvest and a weak currency, coupled with fuel shortages and high prices of agricultural inputs inflating production and transportation costs. In Ethiopia, prices of maize continued to generally increase in April and were well above their year-earlier levels, mainly due to the continuous depreciation of the country’s currency, which resulted in increased transport and production costs. A reduction in market availabilities due to movement restrictions provided additional support. In Kenya, prices of maize began to increase seasonally in April after declining in March with the recent secondary harvest. Similarly, in Burundi, prices of maize increased in April after the declines in the previous months, with prices of other staples, including beans and potatoes, also reported to be on the rise. The recent increases were mainly driven by panic buying amid the pandemic. In Rwanda, prices of maize remained stable in April after declining in the past three months with the “2020A” season harvest. By contrast, increases were reported in non-cereal food prices, including pulses and vegetables, as movement restrictions to contain the pandemic resulted in trade disruptions. In Somalia, prices of coarse grains followed mixed trends in April, with some declines of maize prices in the main producing areas with the recent “Deyr” off-season harvest, and those of sorghum stable or increasing. Prices of sorghum were around or below their levels in April last year reflecting adequate domestic availabilities, while prices of maize were higher due to significant flood-related crop losses. In the United Republic of Tanzania, prices of maize continued to decline in April after the completion of the “Vuli” harvest, albeit at slower rates than in March. Despite the recent declines, however, prices in April remained generally higher than a year earlier due to the reduced 2019 cereal production coupled with sustained demand from East and Southern African countries.

National policy responses to limit the impact of COVID-19 on food markets - update

Kenya, on 26 March 2020, reduced the Value Added Tax on all goods from 16 percent to 14 percent, starting from 1 April.

Somalia, on 15 April 2020, suspended taxes on rice and dates and reduced those on wheat flour and cooking oil.

The Sudan, on 2 April 2020, introduced a ban on sorghum exports effective from 15 April to ensure domestic availabilities. Measures were also put in place in April to counter the over-pricing of food items.