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Prices of coarse grains stabilized or increased further in May but generally high

10/06/2020

Prices of coarse grains levelled off or increased further in May but were generally higher year on year. The high level of prices reflects the disruption to food supply chains and panic-buying related to the COVID-19 pandemic in the past few months, which added to the upward pressure from the below-average 2019 cereal outputs and difficult macro-economic conditions. In Uganda, prices of maize levelled off in May after surging in April, as the easing of lockdown measures abated buying and the release of stocks by traders in anticipation of the upcoming first season harvest eased supply pressure. Prices of maize remained overall stable also in the United Republic of Tanzania. Similar patterns were recorded in Burundi, where prices of maize held relatively steady in May, after the increase in April, with the expected above-average “2020B” season harvest weighing on prices. In Rwanda, prices of maize declined in May, as traders released stocks ahead of the “2020B” season harvest, about to start. In Ethiopia, prices of maize remained relatively stable or increased in April and were generally well above their year-earlier levels mainly due to the continuous depreciation of the country’s currency, which has resulted in increased transport and production costs. In addition, logistics disruptions due to movement restrictions linked to the COVID-19 pandemic have recently affected market availabilities. By contrast, in Somalia, prices of maize and sorghum in the capital, Mogadishu, increased significantly for the second consecutive month in May as a result of the COVID-19-related movement and trade restrictions. Increased demand caused by panic buying amid the pandemic and the Ramadan festive period provided further upward pressure. Prices were overall at high levels, however, compared to May last year, those of maize were higher than the prices of sorghum due to a below‑average 2019 production. Similarly, in South Sudan, prices of cereals in the capital, Juba, surged for the second consecutive month in May. Despite the easing of movement restrictions in early May, continued disruptions to food supply chains, hoarding and a further depreciation of the country’s currency triggered the price spikes. Overall, prices of cereals in May were at exceptionally high levels 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 also continued to increase in May and reached record highs. Disruptions to market supplies amid COVID-19-related control measures, coupled with stronger domestic demand also due to the Ramadan festive period, underpinned the price increases. However, prices of sorghum increased at slower rates than in March and April, as an export ban introduced in mid-April eased supply pressure. The exceptionally high level of prices is also 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.