Yemen Market Watch Report, Issue No. 27, August 2018
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Highlights
- The Yemeni Riyal further weakened in August 2018, and continued to drop sharply in September losing nearly 180% of its pre-crisis purchasing power.
- In-country food stocks are estimated at 1.4 million MT as of mid-August 2018. Wheat stock may cover the national requirement for about three months, rice for two months while vegetable oil may last within a month. Fuel commodities (petrol and diesel) are not widely available. Al Hudaydah suffers the most from scarcity of commodities in the markets due to the intensification of fighting.
- Retail prices of food commodities increased by 4-7% in August 2018 compared with those in July, and 46%-116% higher than in precrisis period. National average fuel prices rose by about 3-7% from July 2018. Moreover, prices of fuel commodities were 64%-143% higher in August 2018 than those recorded during the pre-crisis period.
- The average cost of the monthly minimum food basket in August 2018 gone up by 6.5% from July, and 79% higher than in pre-crisis period.
- The Alert for Price Spikes (ALPS) indicators for all basic food items and the cost of food basket remained at their crisis levels in August 2018.
Macroeconomic Situation
As the war further escalated and intensified within and around the port city of Al Hudaydah, availability and access dimensions of food security have deteriorated in many parts of Yemen, particularly in the conflict areas of Hudaydah Governorate. Markets in conflict villages were either not fully functional or had completely stopped working. Active conflicts and airstrikes also intensified in several frontlines in Sa’ada, Taizz, Al Jawf, Hajja, Mareb, and Sana’a governorates. The ongoing widespread war has not only resulted in massive displacements, disruption of livelihoods and destruction of basic infrastructure, but also pushed the economy and essential social services (health, WASH and education) to the state of collapsing.
The alarmingly fast depreciation of the Yemeni Riyals (YER) against US Dollar (USD) during the past few months has further deteriorated the socio-economic and humanitarian situation in the country. The national average exchange rate in August 2018 was about 550YER/USD, which dropped by 10.5% compared to July (497YER/USD) and was 155% lower than the pre-crisis rate.
During the first two weeks of September 2018, the national average exchange rate reached as high as 600YER/USD, and lost about 180% of its value before the crisis. During the month of reporting, governorates such as Taiz, Abyan, Ad Dale, and Lahj have had worse exchange rates than the national average (Chart 1).
Weekly trends can be found in Annex 2.https://reliefweb.int/report/yemen/yemen-market-watch-report-issue-no-27-august-2018