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SUDAN MONTHLY MARKET UPDATE

July 2013

This Monthly Market Update (MMU) is designed to better inform decision makers and analysts in Sudan of current prices and market trends. The data sources for the 17 Northern States of Sudan are from the available data collection system of the Ministry of Agriculture and Irrigation /Ministry of Animal Resources, Range and Fisheries (MoAI/MARF). The Sudan MMU was started by the Sudan Institutional Capacity Program: Food Security Information for Action (SIFSIA), which released the first 51 issues of the MMU until the project was discontinued. FSTS & FEWS NET are continuing this effort.

FAMIS (Food & Agriculture Market Information System - Sudan) collects crop, livestock, and horticultural and animal products prices from major markets of the Sudan on a weekly basis. Data collection is done according to a specific methodology to ensure the accuracy and objectivity of the published information. FAMIS is a web based – SMS platform that operates through www.farmers.sd, the main source of price data for the Monthly Market Update.

SUMMARY:

Cereal prices continued to be generally stable in most of the monitored markets in Sudan in June 2013. A trend that deviates from normal during the lean season (May to September). Ample sorghum supplies from last season's harvests continued to influence the markets and compelled sorghum traders to gradually liquidate their stocks in preparation for the 2013/14 season.

High marketing costs due to insecurity have resulted in a 6 percent increase in sorghum prices in Nyala (South Darfour) and in Kadugli (South Kordofan). Zalengei (Central Darfour State) market recorded the highest sorghum and wheat price increases of nine and 20 percent, respectively.

Sorghum prices increased slightly in June in the source market of Al Qadarif and were close to export parity price levels as prices decreased on international markets, implying a decrease in the export competitiveness of Sudanese sorghum.

Millet prices were generally stable on most markets.

Wheat prices continued to increase with El Fasher (North Darfour State) recording the highest increase of 14 percent while Dongola (Northern State - main wheat production area in Sudan) recorded a 5 percent decrease.

The official national annual inflation rate issued by the Central Bureau of Statistics (CBS) indicates a drop in the national inflation rate from 37 percent in May to 27 percent in June. According to the CBS, this drop is mainly due to the relative stability of the Food Consumer Price Index (CPI) between June 2012 and June 2013.

The terms of trade between cereals and livestock continued to be in favor of the pastoralists. This trend is likely to continue in the next months as pasture conditions improve during the course of the July-September rainy season and as cereal prices decrease gradually due to the favorable production outlook.

Future cereal price trends will be determined by the progress of July-September rains. If rains are good, traders will continue to sell their old stocks causing prices to remain stable. If rains are normal to below normal sorghum prices will likely start to increase in the coming months.

Figure 1: Real Wholesale Prices for Sorghum in Khartoum (June 2009 – June 2013)

Figure 2: Comparison of Export Parity (XPP) and Domestic Prices for

Sorghum from Al Qadarif (June 2012 – June 2013)

Source: The Food & Agriculture Market Information System (www.farmers.sd) and

the Central Bureau of Statistics (CBS). International prices are from USDA and International Grain Council, www.fao.org/es/esc/prices/

Seasonal Calendar and Inflation rates 2

Nominal and real wholesale prices of cereal 3

Terms of trade and sheep prices 3

Market analysis 4

CONTENT:

July. 2013 Bulletin # 66

SUDAN MONTHLY MARKET UPDATE

Food Security Technical Secretariat (FSTS) The Food Security Technical Secretariat was established in late 2009. Several

government institutions are represented in the FSTS to ensure maximum

coordination to achieve food security. FSTS supports various food security

information systems and provides policy briefs as well as monitoring of the impact

of applied polices on food security. FSTS also conducts analysis of the food security

situation at the locality level.

Famine Early Warning Systems Network (FEWS NET ( Created by USAID in 1985 to help decision-makers plan for food insecurity, FEWS

NET provides early warning and evidence-based reporting on more than 30 of the

world’s most food-insecure countries. In partnership with international and

national agencies, FEWS NET collects and analyzes data on such factors as weather,

climate, agriculture production, prices, trade, and livelihoods. Reports are available

at www.fews.net.

(FAMIS)

Famine Early Warning Systems Network

Food Security Technical Secretariat – SUDAN

(FEWS NET) (FSTS) لإنزار المبكر لدرء مخاطر المجاعةشبكة أنظمة ا

السودان -الغذائى الأمانة الفنية للأمن

FOOD SECURITY TECHNICAL SECRETARIAT

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SUDAN MONTHLY MARKET UPDATE

July 2013

Figure 3: Real Wholesale Prices of Wheat in Khartoum ( June 2009 – June 2013)

Figure 4: Seasonal Calendar

Source : FEWS NET

Figure 5: Relative Price Increases – Food Inflation / Non-food Inflation in Sudan (June 2012 – June 2013).

Figure 6: Monthly Inflation Rates in Sudan (Base 2007 = 100) (June 2012 – June 2013)

Source: The Central Bureau of Statistics, Consumer Price Indices and Inflation Rates, Sudan and Khartoum

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SUDAN MONTHLY MARKET UPDATE

July 2013

Figure 7: Nominal Wholesale Prices of Staple Cereals in Khartoum, (June 2012 – June 2013).

Figure 8: Real average and Current Wholesale Prices of Sorghum (Feterita) in Khartoum (June 2012 – June 2013).

Figure 9: Nominal Wholesale Sorghum (Feterita) Prices for Selected Markets ( June 2012 – June 2013).

Figure 10: Baladi Sheep Prices in Elsalam Livestock Market – Omdurman (June 2012 – June 2013).

Figure 11: Terms of Trade for Baladi Sheep in Elsalam Livestock Market – Omdurman (June 2012 – June 2013).

Source: www.farmers.sd

Notes: (1) Prices are expressed in Sudanese Pounds per 90 kg bag for cereals and per animal for sheep. (2) One bag = 90 kg; 1 US $ ≈ 5.5 Sudanese Pounds (SDG). (3) Terms of Trade (TOT) is expressed in quantity of sorghum per head of sheep.

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SUDAN MONTHLY MARKET UPDATE

July 2013

MARKET ANALYSIS

In contrast with the typical steady soaring staple food price trends during the lean season (May-September), cereal prices remained relatively stable between May and June on most of markets in Sudan (Figure 4). Ample supplies form last year’s bumper harvests continued to arrive on markets and traders and large farmers gradually liquidated their stocks in preparation for the new season that extends from June 2013 to January 2014. However the release of stocks remained limited as the anticipated average to above average rains did not materialize in June in most of the producing areas of central Sudan.

In Zalingi market in central Darfur, sorghum and wheat prices increased by nine and 20 percent, respectively. This was mainly due to high transportation costs induced by road blocks due to insecurity and heavy rains in these areas. Cereal prices were 11 percent less than their respective June 2012 levels but close to 90 percent higher than their five-year average levels. In Al Qadarif (located in the main sorghum production area), sorghum prices increased by five percent in line with the seasonal trend at this time of the year. These prices were close to the export parity price levels due to a price decrease on international markets, implying a decline in the export competitiveness of Sudanese sorghum.

Millet prices were generally stable in June on most of the monitored markets. Millet prices decreased in Ad Damazine (Blue Nile State) by five percent and they increased by six percent in Al Qadarif (Central Sudan). Millet prices in Sudan were nine percent lower compared to June 2012 but 79 percent higher than their five-year average levels. Wheat prices continued to increase on markets due to high demand during the month of Ramadan (Figure 3). Zalingi (Central Darfur state) and El Fasher (North Darfour State) recorded the highest increases between May and June of 20 percent and 14 percent, respectively. Wheat prices were 16 percent higher than their respective June 2012 levels and 95 percent higher than their five-year average levels. According to the Central Bureau of Statistics (CBS), the national annual inflation rate dropped to 27 percent in June compared to 37 percent in May. CBS attributed this drop to the decrease in cereal prices and stability of other food items (food constitute more than 50 percent of the overall household expenditures), as well as due to the decrease in the cost of services. The rural and urban inflation rates are almost identical to the national rate (figure 5 and 6).

The terms of trade between cereals and livestock continued to be in favor of pastoralists. This trend is likely to continue as pasture conditions improve during the rainy season throughout the country. Cereal price trends between July and September will depend on the progress of the ongoing rains. Some slight price increases have occurred during the first three weeks of July due to delayed rains. However, these prices could stabilize or start to decrease if rains perform as well as anticipated in the in central surplus production areas of the country.