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Prices of coarse grains at high levels across the subregion, despite seasonal declines in some countries

12/02/2020

Prices of coarse grains followed mixed trends in January, but remained well above those a year earlier across the subregion due to reduced first/main season harvests in several cropping areas and to the difficult macro-economic situation in the Sudan and South Sudan. Heavy rains in late 2019, disrupting agricultural and marketing activities, contributed to sustain the high level of prices in several countries. In Uganda, prices of maize declined seasonally in January as newly harvested second season crops increased market availabilities. However, prices remained well above those a year earlier as a result of a reduced first season harvest and sustained foreign demand, mainly from Kenya and South Sudan. Similarly, in Rwanda and Burundi, prices of maize also decreased in January with the start of the “2020A” season harvests. However, despite the recent declines, prices remained significantly higher than a year earlier in both countries. In Rwanda, prices were mainly supported by the impact of the closure of border custom posts with Uganda in February 2019, which reduced imports, while in Burundi they were underpinned by sustained maize demand from eastern Democratic Republic of the Congo, where an upsurge in violence disrupted agricultural operations and resulted in significant production shortfalls. In Kenya, prices of maize followed mixed trends in January but were significantly higher than a year earlier, mainly supported by substantial crop production shortfalls of the main “long rains” harvest, concluded in late 2019. In South Sudan, prices of maize declined slightly in January as the second season harvest, currently underway in southern bi-modal rainfall areas, increased market availabilities, while prices of sorghum remained unchanged. Overall, prices of coarse grains in January were at exceptionally high levels, mainly driven by reduced domestic availabilities, flood-related trade disruptions, a difficult macro-economic situation and the lingering impact of the prolonged conflict. In Somalia, prices of sorghum generally declined in December with the secondary “Deyr” harvest, recently completed and estimated at above-average levels as abundant rains over the main producing areas boosted yields. By contrast, prices of maize were mixed, increasing in Marka, where floods resulted in substantial production shortfalls. Overall, prices of sorghum and maize were higher than in the same month last year due to a tight supply situation following a poor 2019 main “Gu” harvest. In the Sudan, prices of sorghum and millet continued to increase in January in spite of the recently concluded 2019 harvest and were at exceptionally high levels, due to a poor output and a weak currency, coupled with fuel shortages and high prices of agricultural inputs inflating production and transportation costs. In the United Republic of Tanzania, prices of maize increased in January despite the start of the secondary “Vuli” harvest in northeastern bi-modal rainfall areas, mainly as a result of strong demand from Kenya, Rwanda and southern African countries, which has pushed prices well above their year-earlier levels. In Ethiopia, prices of maize remained at high levels even with the favourable outcome of the recently completed “Meher” harvest, mainly due to the depreciation of the country’s currency, which resulted in increased fuel and agricultural input prices inflating transport and production costs.