Reference Date: 28-October-2022

Shortages and high prices of agricultural inputs raise concerns for 2022 cereal output

Harvesting of the 2022 mostly rainfed main (wet) paddy crop, accounting for about 90 percent of the annual output, is ongoing and will finalize in December. The 2022 May‑September rainy season was generally favourable over the key rice producing central and southern provinces, benefitting crop development. However, shortages and high prices of agricultural inputs, including fertilizers, pesticides and herbicides, resulted in their reduced application, curbing yields across the country. In the minor paddy producing northern provinces, yields were also affected by erratic and below‑average rainfall amounts between May and September.

Overall, the production of the 2022 main (wet) paddy production as well as output of other crops, such as maize, cassava and vegetables, are expected at below‑average levels.

Starting in mid‑November‑2022, FAO and WFP will conduct an in‑country Crop and Food Security Assessment Mission (CFSAM). The Mission aims to assess the agricultural production in 2022, particularly of the main staple cereals, and to analyze market conditions and households’ food security situation.

Maize exports in 2023 forecast below average

Exports of maize, the country’s main exported cereal, are forecast at 150 000 tonnes, well below the five‑year average, reflecting the expectation of a reduced 2022 output.

High prices of most basic food products in September 2022

Prices of rice, the country’s main staple food, increased in most markets since the beginning of 2022 and were at high levels in September. The price increase was associated with high transportation and input costs, coupled with expectations of a reduced production of the 2022 main paddy crops. Similarly, prices of a wide range of imported and locally produced basic food commodities, including wheat flour, meat and cooking oils, have risen throughout 2022 and reached, in many cases, record or near‑record levels in September. According to the Lao Statistics Bureau, the inflation rate last September was estimated at 34 percent, the highest level since May 2000. The local currency (kip) depreciated steadily since late 2021 and last September it reached a record low level at LAK 15 894/USD 1, largely due to concerns about the government’s ability to meet its debt repayment obligations and sizeable current account deficits.

Acute food insecurity deteriorates since early 2022

The number of people facing acute food insecurity has increased since early 2022, mainly due to prevailing high food prices and reduced incomes owing to the negative effects of the COVID‑19 pandemic on the economy. Food insecurity of rural households is likely to deteriorate in the next months as their livelihoods have been already under stress due to the high prices of agricultural inputs and the expected decrease in agricultural output.

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