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Mr. Tarnue D. Koiwou
Food Security & Nutrition Unit,
Ministry of Agriculture
Ms. Elizabeth S. Harris
Statistics Section, LISGIS
Mr. Boima H.M. Sonii
Price Statistics Section, LISGIS
WFP VAM Unit
Mr. Emmanuel K. Anderson
FAO
Mr. Jesse Yuan
.
Price Bulletin Date June 2017 Volume 46 Issue May 2017
T he May 2017 46 edition of this bulletin analyzes price trends of key food and other essential
commodities. More specifically it analyses the price trends for 50kg imported parboiled rice, 50kg
empty bag full of cassava, for transportation from Paynesville to all markets surveyed, and for
palm oil and charcoal. Gasoline prices are also reviewed. In addition, this edition examines the post Ebola
trends on prices of food staples and other non-food commodities.
TRENDS ON INTERNATIONAL MARKETS
In May 2017, the FAO Food Price Index (FFPI) averaged 172.6
points, up 3.7 points (2.2 percent) from April and nearly 16
points (10 percent) higher than its May 2016 level. The rebound
in the value of the index followed three months of consecutive
declines. With the exception of sugar, all other commodity
indices increased in May. The FAO All Rice Price Index also
reported an average of 202 points in May 2017, nearly 2
percent higher than in April and the highest value since October
2015. International rice prices increased in all major rice
exporters, the exception was South American countries. The
most dramatic increase was recorded in Thailand, where the
benchmark Thai 100% broken white rice reached a nine-month
high of US$ 430 per tonne. The 9 percent monthly increase
coincided with the return of Bangladesh into the market. In
addition, was the imminent purchases by the Philippines which contributed to price increases in India,
Pakistan and Vietnam.
This latest increase brought the January-May value of FAO All Rice Price Index to 196 points, on par with
its level in the corresponding period of 2016. Compared to the first five months of 2016, average prices of
lower quality indica and Aromatic rice were up by 2 and 32 percent, respectively. Instead, prices remained
4 and 9 percent below year-earlier levels in the higher quality Indica and Japonica segments.
(http://www.fao.org/worldfoodsituation/foodpricesindex/en/)
INTRODUCTION
KEY POINTS
International rice export prices remain firm;
The current average retail price of imported rice 50kg in Liberia is up by 27% compared to same period last
year (May 2016) but stable;
Price of palm oil, charcoal and especially gasoline also increase;
Terms of trade in general shifted against both agricultural workers and palm oil producing households.
GLOBAL RICE PRICE TRENDS
O
,
The average price for a gallon of palm oil currently stands at L$ 428
up 12 percent compared to a year ago but is –0.3 percent lower
than the past one month. Palm oil
prices were reportedly higher
compared to a year ago in
Greenville (77.7%), Bo Waterside
(65.2), Gbarma (53%), Zwedru
(38.9%) and Toe Town (33.3%)
markets (see Figure 4). Palm oil
traders interviewed during market
visits attributed the increase in
price to the prevailing exchange
rate—depreciating Liberian Dollar
against the US Dollar as well as the
increase in transportation costs
which is mostly due to the poor
condition of farm to market roads.
Important to note is the huge
domestic demand in addition to
regular cross-border flows to
neighboring Guinea and Sierra
Leone. According to traders
interviewed in Foya market,
approximately 11,340 liters of palm
oil or more is sold to traders from
Guinea on market days.
The price of palm oil in other
markets recorded stable to lower
prices in comparison to the past
one year, a similar trend also
observed between April and May
2017. Palm oil prices is likely to
remain stable into June but could
increase in the third quarter of this
year due to normal seasonal effects
and low production.
The price for a 50kg bag of imported parboiled rice in May 2017
averaged LD$ 4,000 up 27 percent compared to the past year but
remained on par with last month level. A year-on-year comparison
revealed that prices increased across all markets monitored with
Bo Waterside, Greenville, Pleebo and Fish Town markets recording
modest increases of 32.3%, 31%, 30% and 29.4% respectively. The
price differentials witness in far-off markets (Greenville and
Pleebo) can be explained by a combination of the depreciating
WHOLESALE PRICE OF IMPORTED RICE
PRICES OF OTHER COMMODITIES
In May, the price for a 50kg empty bag filled with cassava averaged
LD$ 653, (12.4 percent) more than what it was sold for in May 2016.
The price for cassava across all markets monitored reported mixed
reactions. According to Figure 3, modest price decrease was observed
in Buchanan (-17.3%) Greenville (-22.2%), Tuobo-Gbaweeleken (-
11.1%) and Fish Town (-16.7%) compared to levels last year, largely
due to supply and demand factors. On the other hand, prices peaked
especially in urban centers like Red Light and Duala markets in
Monrovia as well as Ganta in Nimba County. The average month-on-
month comparison is reportedly stable (1.6 percent) with price
differentials across the markets. The demand for cassava is expected
to increase in the coming months as households with depleted food
stocks will rely on cassava and cassava products to bridge their food
gaps, a situation which could lead to increasing prices for the product.
local currency against the US dollars and poor road condition which
translates into higher transportation costs when moving commodities
from the main port of entry, in Monrovia. The increase in Bo Waterside
market on the other hand, in close proximity to Monrovia, could be
due to cross-border flows to neighboring Sierra Leone. Foya and
Barclayville markets are currently the most expensive place to
purchase imported rice in the country while Red Light market in
Monrovia remains the cheapest.
Firm international rice prices in recent months coupled with seasonal
effects (bad roads due to heavy rains) in the coming months could
further increase prices of imported rice and other food commodities.
The vulnerable households with weak purchasing power whose food
stocks have been depleted and will have to rely on markets and may
face serious challenges accessing the available food.
Meanwhile, sowing of the new rice crop is ongoing in many parts of
the country. In general, the food situation across the country is
expected to be good but current domestic factors (poor economic
performance of the country leading to high food inflation as well as
depreciation in the local currency will constrain households’ food
access.
,
About 98% of Liberia’s energy needs are met by charcoal. Most
people residing in Tubmanburg, Gbarma and Bo Waterside rely
considerably on charcoal production as means of livelihood. Figure 5
shows that current prices of charcoal increased in most markets
compared to last year. The average price for a bag of charcoal
currently stands at LD$259 (9.5 percent) higher than what it was sold
for in the past one year but slightly lower (-1.4 percent) than a month
ago. Like other commodities, the increase in charcoal prices is a
reflection of the prevailing exchange rate—depreciating local currency
against the US dollars. The price of charcoal may likely continue to go
up due to the latter coupled with heavy rains which limits production.
PRICES OF OTHER COMMODITIES
PRICES OF OTHER COMMODITIES
The average price for a gallon of gasoline is LD$400, up 35.6 percent
compared to a year ago. According to Figure 6, all Liberian markets
witnessed increase in gasoline prices in line with international price trends
(about 1.4 percent rise, on average in the last three months). In addition,
is the depreciating local currency against the US Dollar. According to the
Ministry of Commerce and Industry (MOCI) circular issued on May 2, 2017,
eleven United States Cents increase was announced in the price of
gasoline. The official retail pump price for a gallon of gasoline currently
stands at LD$350 (US$3.14) while Fuel oil (AGO) is LD$345 (US$3.11). It is
important to note that further increase in gasoline prices will put pressure
on prices of food and other basic commodities.
TRANSPORTATION CORNER
TERMS OF TRADE (ToT)
The price of imported rice in the coming months is expected to register an upward trend, primarily because most farming
households’ stocks are already exhausted and demand for imported varieties will increase as majority of the rural
households will rely on markets for most of their food needs. Further more, the current deplorable state of the roads as a
result of the heavy rains will lead to higher transportation cost with consequent increase on food prices and other basic
commodities. This increase will affect the purchasing power of most vulnerable households (especially poor farmers) who
depend on markets for their food.
On the other hand, the continued depreciation in the local currency against the US dollars (from L$102.50 in December
2016 to L$110.00 in May 2017 for US$1.00) since last year has the potential to make imports more expensive, which
normally leads to higher import parity price in comparison to domestic prices. This is very important considering the
upward trend in global rice and gasoline prices in recent months. These negative global and domestic factors coupled with
a looming lean season could seriously constrain households (especially the rural poor) food access. Palm oil prices are also
expected to increase as the oil palm harvest come to end in June coupled with the growing domestic and foreign demand.
In spite of normal supply of imported rice and other off-season crops on the markets, the Ministry of Agriculture and
partners will continue to closely monitor food prices in the country.
Terms of Trade (ToT) between daily wage and imported rice was
unfavorable for agricultural workers in almost all Liberian markets
across the country, the exception was Foya, Voinjama, Bo Waterside
and Tubmanburg markets. The current dominant agricultural
activity is planting while construction remains the main source of
casual employment in Monrovia and Buchanan. The terms of trade
(ToT) here reflect the amount of rice in kilo grams that a household
may purchase in exchange of earnings from their daily work either
in construction, agricultural labor or the production of charcoal.
Casual laborers on average are getting 1.1 kilogram of rice less from
his/her daily earnings this year compared to a year ago. The decline
in terms of trade is due to stable to lower wage rates for casual
laborers against the increase in imported rice prices.
The terms of trade (ToT) reported here reflect the amount of rice in
kilograms that smallholder oil palm producers may purchase in
exchange for a gallon of palm oil. Figure 9 shows that terms of trade
was unfavorable for most of the palm oil producers in most of the
markets when compared to the past one year. The exception was Bo
Waterside, Gbarma, Greenville, Toe Town and Zwedru where terms of
trade slightly shifted in favor of palm oil producers. Figure 9 also shows
that palm oil producers/sellers in Fish Town are obtaining 3.4 kilograms
of rice less than the past one year from sale of a gallon of palm oil. A
similar situation was also observed in Tubmanburg (-2.6 grams), Red
Light (-2.2 grams), Duala and Bopolu (-2.0 grams). The decline in terms
of trade will weaken palm oil producing households purchasing power,
thus constraining their food access.
OUTLOOK AND CONCLUSION
Liber ia Price Monitor– Annex May 2017
Tables: Prices of Imported rice, Cassava, Palm oil and Gasoline by Markets
