![]() ![]() The exchange rate is a key determinant of food prices in Yemen due to the country’s high dependence on imports. The measure is expected to primarily affect food commodity prices in IRG areas and non-food commodity prices across the entire country, as many non-food imports enter Yemen through IRG-controlled ports. Traders, the governor of Aden, and the SBA-based Chamber of Commerce, among others, criticized the anticipated impacts on household purchasing power. While the IRG has yet to implement these plans, food prices reportedly increased in IRG-controlled areas – including by more than 10 percent in Aden – in the following days, according to key informants. Most notably, on January 10, authorities announced plans to raise the exchange rate for customs duties by 50 percent (though some essential commodities, including key staple foods, are exempted) and raise electricity, fuel, and gas prices. In response, IRG authorities have adopted several measures to compensate for the significant loss of revenue. Oil exports from areas controlled by the internationally-recognized government (IRG) remain on hold due to the threat of drone strikes directed by the Sana’a-based authorities (SBA). Emergency (IPC Phase 4) outcomes are expected to persist in Marib and emerge in Hajjah in February/March given expectations for gradually re-escalating conflict and large populations of displaced households who are highly dependent on assistance. Overall, Crisis (IPC Phase 3) outcomes are expected to remain widespread throughout the projection period. In the coming months, poor households are expected to be affected by further food and fuel price increases, and rural households in highland areas will experience seasonally declining access to income during the local agricultural offseason in February and March. Terms of Trade serve as proxy indicators for purchasing power by measuring the relative value of these income-generating activities (wages and livestock prices) to the cost of purchasing staple foods (staple food prices).Despite the slight scale-up in food assistance in recent months, millions of households in Yemen are likely facing food consumption gaps due to significantly above-average prices of food and essential non-food commodities alongside sharing of assistance benefits. Purchasing power is a significant food security constraint, as incomes from casual labor and livestock, the main income-generating activities for households and poor households, tend to fluctuate. YER currency valuation has fluctuated in recent years due to foreign intervention in monetary policy, high seasonal demand, increased foreign trade and trade policy. There are currently two exchange rates split by monetary governance between the Sana’a-based authorities (SBA) and the internationally recognized government (IRG). Wheat grain and flour prices are susceptible to the exchange rate of the Yemeni Rial (YER) and US Dollar (USD). Sana’a City serves as a wholesale and retail market for households in northern and central Yemen, and Sayoun serves as a reference market of the east. Al Hudaydah is an important assembly, wholesale, and retail market in the most populous region in the country where most households are dependent on markets for staple foods. Aden City, located in a trade deficit zone, is the reference market for the southern region and the largest wholesale market with significant storage capacity. Households are heavily dependent on imported wheat supplies reaching the regional trading centers of Sana’a City, Al Hudaydah City, and Aden City-critical markets that supply other urban and rural districts. Wheat flour is the staple food for most households in Yemen sorghum and rice are most often consumed as a substitute. For each FEWS NET country and region, the Price Bulletin provides a set of charts showing monthly prices in the current marketing year in selected urban centers and allowing users to compare current trends with both five-year average prices, indicative of seasonal trends, and prices in the previous year. The Famine Early Warning Systems Network (FEWS NET) monitors trends in staple food prices in countries vulnerable to food insecurity. ![]()
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