Highlights
• Inflation: The November Consumer Price Index (CPI) was mixed increasing slightly in the North Somali Shilling (SoSh) zone, slowing down in Central while remaining relatively stable in the South as well as in Somaliland shilling (SlSh) regions. Annual inflation rates are significantly lower than their levels a year ago in all areas except in SlSh zone where it is relatively stable. The cost of living is significantly elevated when compared to the base period (March 2007) in SoSh areas; it is moderately high in SlSh areas.
• Exchange rates between local currencies and the USD remained relatively stable over the reporting month. Compared to the same period a year ago, SlSh depreciated against the USD, whereas SoSh gained considerable value. The annual appreciation of the SoSh is attributed to supply of dollars through humanitarian interventions; dollar proceeds from Hajj livestock exports; renewed investments in infrastructure rebuilding and reconstruction in Mogadishu; increased port functioning and emerging new economic and business opportunities particularly in Mogadishu. The weakened SlSh is due to increased supply and circulation of new currency notes.
• Local grain prices were mixed- they remained stable in most markets in Juba and Hiran; increased slightly in most Sorghum Belt markets but declined somewhat in Shabelle, Banadir, Central and Northern Regions. Diminished cereal stocks as a consequence of below average Gu 2012 crop production and restricted trade flows due to insecurity and impassable roads (following recent Deyr rains) were the main factors that drove local cereal prices on the upside over the past month. On the other hand, the combined effects of reduced prices of imported food and off-season maize production and humanitarian food have mitigated the cost of cereals. Compared to a year ago, cereal prices are significantly lower in the South, Central and North SoSh zones but stable in the North SlSh areas.
• Prices of most imported commodities were generally stable in most markets over the month of November but declined in Banadir. Compared to the same period last year, imported commodity prices are significantly lower. The decline in prices of imported food is mainly attributed to the strengthened SoSh and improved port operations.
• Livestock prices were mixed; declining slightly in most markets but at the same time remaining stable and increasing in pockets of other regions. The reductions in monthly prices were due to reduced demand with the end of Hajj. Compared to the same month last year, livestock prices are significantly higher across all regions. The price appreciation was mainly due to improved body conditions, high export and local demand and low supply of saleable stock.
• Labour wages sustained their levels or increased in all regions; supported by Deyr seasonal agricultural activities. Labour wages are significantly higher compared to their levels a year ago in most markets.
• Terms of Trade (ToT) between labour wage and cereals were mixed in November, mostly improving on the backdrop of increased labour wages. The purchasing power has improved when compared to a year ago due to lower cereal prices, improved local quality goat prices and higher labour wages.
