Highlights
• Inflation: The October Consumer Price Index (CPI) declined in all Somali Shilling (SoSh) areas but remained steady in Somaliland Shilling (SlSh) regions. The CPI is significantly higher compared to the base period (March 2007) in SoSh areas; it is moderately elevated in SlSh areas.
• Exchange rates between local currencies to the USD remained relatively stable with the SoSh losing slight ground while the SlSh extended signs of recovery in the last two months. Compared to the same period a year ago, SlSh depreciated against the USD, whereas SoSh gained considerable value. The appreciation of the SoSh is attributed to increased supply of dollars through humanitarian interventions, high livestock trade, increased investments and port activities (Mogadishu). The weakening of SlSh is due to increased supply and circulation of new currency notes.
• Local grain prices were mixed; remained stable in most markets, increased slightly in Juba regions, but declined significantly in the North SoSh areas and in Banadir. Compared to a year ago, cereal prices are significantly lower in the SoSh zones due to higher supplies from a combination of sources, including domestic production, commercial imports and humanitarian food; the prices were relatively stable in the North SlSh areas in the same period of comparison.
• Prices of most imported commodities were generally stable in most markets over the month of October 2012, but declined in the port cities and in the surrounding markets. On the contrary, wheat flour prices went up in most markets as a result of high wheat price on the international markets due to tight global supplies. Compared to the same period last year, imported commodity prices are significantly lower due to the strengthened SoSh, higher supplies through Mogadishu port.
• Livestock prices increased in nearly all markets during October. 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, low supply of saleable stock and high export demand during Hajj (Muslim pilgrimage).
• Labour wages either remained constant or increased in all regions supported by ongoing Deyr seasonal preparations in the South-Central and Gu-Karan harvests in the Northern agro-pastoral livelihoods. 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 October mostly remaining stable but significantly rising in Banadir and parts of Sorghum Belt. The purchasing power has significantly improved when compared to a year ago due to lower cereal prices, improved goat prices and higher labour wages (Table 1).
