Commodity Price and Cash Liquidity Tracking Update

Transcription

1 Commodity Price and Cash Liquidity Tracking Update September, 20 Major Highlights The average selling price of maize grain across the targeted districts in the past fortnight remained at $0.41/kg ($7.20 per bucket or typically $7.00 per bucket) from that of - ust. In Beitbridge, the price increased from an average cost of $0.43/kg to $0.44/kg while in Mberengwa, the average price of maize grain went down from $0.46/kg to $0.40/kg. The Grain keting Board (GMB) continued to be the main source of maize grain across the districts complimented by informal or private traders. The average prices of maize meal slightly decreased in the following districts; Nkayi from $0.59/kg to $ 0.58/kg, Beitbridge from $0.66/kg to $0.58/kg and Masvingo Rural from $0.58/kg to $0.57/kg. The average selling price of sorghum went up from $0.37 to $0.45, an increase by $0.08. The average selling price of Millets was $0.60/kg, a slight increase from the selling price in the end of ust where the average selling price was $0.52/kg. The average selling price for cooking oil went down slightly from $1.91/litre end-ust to $1.90/litre. In Umguza, cooking oil is now available, contrast to the situation during the previous reporting period of end of ust where customers were being limited to purchasing one bottle per customer. The number of clients who managed to cash out all the money they wanted at first attempt was 74%, a decrease from 81% during the end of ust reporting period. 1. Staple foods i. Maize Grain The average selling price of maize grain across the targeted districts in the past fortnight remained at $0.41/kg ($7.20 per bucket or typically $7.00 per bucket) from that of -ust. The Grain keting Board (GMB) remains the major supply across the districts. The GMB is reportedly buying grain from local farmers from wards with better harvests and who have excess grain at an average price of $280 to $300 per metric tonne. However, unfortunate to note that GMB has continued to maintain its position of closing satellite selling points, citing high operational costs. The most affected areas are Matebeleland North and South provinces. Private or informal traders continue to sell the commodity. At informal markets a bucket (17.5kg) of maize is being sold at $7.00 that translates to $0.40/kg. The average price of maize grain per kg remained unchanged in Matebeleland North, Matebeleland South and Masvingo provinces. A change 1

2 in the average price of maize grain was experienced in the lands province, where the average price went down from $0.40/kg to $0.38/kg from end of ust to mid-september. The highest average price of maize grain per kg during the reporting period is in Matebeleland South province where the average cost is $0.45/kg. Figure 1 shows the trends on the prices of maize grain across the targeted districts. ii. Maize Grain Price Trends at District level The selling price of maize grain remained the same in thirteen out of the fifteen (13 out of ) targeted districts. Changes of the cost of maize grain were experienced in two (2) districts, namely Beitbridge and Mberengwa. In Beitbridge, the price increased from an average cost of $0.43/kg to $0.44/kg while in Mberengwa, the average price of maize grain went down from $0.46/kg to $0.40/kg. The decline in the price of maize grain is mainly attributed to the increase in the supplies due to harvests of the winter crop from the local irrigation schemes and also GMB is selling at a relatively lower price driving the open market price down. The highest average price of maize grain was in Umzingwane, Matobo, Insiza and Gwanda, where the average selling price was $0.45/kg. The lowest average selling price was in Gokwe South where the price was $0.34/kg. iii. Maize meal The average selling price of maize meal remained at $0.58/kg as at end ust. The commodity is mainly supplied by retailers and informal traders. Maize meal is readily available across all the four provinces, though it is also becoming noticeable that GMB is gradually pulling out from being a major supplier of maize meal. This is noticeable in Masvingo province. In Matabeleland South (Beitbridge, Gwanda, Insiza, Matobo and Umzingwane) retailers are selling maize meal imported from neighbouring South Africa. Locally, major business centres in the provinces have stocks of maize meal which is meeting the local demand. Maize Meal price trends at district level No price changes were noted from those of mid-ust across all the districts except in three out the fifteen districts. The changes in the average price of maize meal were noticed in Nkayi, Beitbridge and Masvingo Rural district. The average prices of maize meal slightly decreased in the following districts; Nkayi from $0.59/kg to $ 0.58/kg, Beitbridge from $0.66/kg to $0.58/kg and Masvingo Rural from $0.58/kg to $0.57/kg. In Beitbridge, the average prices slightly decreased because GMB in the district is selling maize meal at a subsidised price, hence also forcing other retailers and traders to sell the commodity at a lower cost so as to attract customers. In Masvingo district the slight decrease in the average price of maize meal can be attributed to the increasing volumes of the commodity on the market as most traders indicated that there has not been any price inflation from the sources where they purchase the commodity. The highest average price of maize meal was in Lupane where it was selling at $0.67/kg, while the lowest average selling price was in Insiza where the average selling price of maize meal was $0.50/kg. Small Grains Sorghum: The average selling price of sorghum went up from $0.37 to $0.45, an increase by $0.08. This is primarily due to availability of the product in two more districts at relatively high varying prices as compared to end-ust. The commodity was available in eight (8) out of the fifteen () districts compared to the previous reporting period, where it was available in six districts. The districts where sorghum during the reporting period was available are; Lupane, Umguza, Umzingwane, Gwanda, Beitbridge, Gokwe South, Shurugwi and Gutu. Sorghum is mainly supplied by informal traders. The district with the highest average selling price of sorghum is Shurugwi where it is being sold at $1.00/kg, while the lowest average selling price is in Gokwe South where it is selling at $0.23/kg. In Gokwe South, 2

3 the prices are low mainly due to the fact that communities have less preference for the commodity especially when maize meal and maize grain are still available. Millet- The average selling price of millet was $0.60/kg, a slight increase from the selling price in the end of ust reporting period where the average selling price was $0.52/kg. The product was only available in seven (7) out of the fifteen CTP districts, compared to the previous reporting period where it was available in eight districts. The district with the highest average selling price was $1.00/kg while the lowest selling price was in Umguza where it was selling at $0.45/kg. Consumer preference reports in lands province (Gokwe North, Gokwe South, Mberengwa and Shurugwi) show that millet is less preferred especially when staple foods such as maize meal and maize grain are available. 2. Non Staple Foods Pulses: The average selling price of sugar beans was $2.18/kg, a slight increase from $2.17/kg at end of ust. Changes in the average selling prices of sugar beans were experienced in Masvingo Rural district, Gokwe North and Beitbridge. In Masvingo and Beitbridge, the prices slightly increased from$2.68/kg to $2.72/kg in Masvingo and from $2.45/kg to $2.57 in Beitbridge. Although the average selling prices of sugar beans went up slightly, in Matebeleland South and lands provinces, it still remains highly favourable, as it is in demand. Other non-staple foods: The average selling price for cooking oil decreased slightly from $1.91 to $1.90. The districts that experienced a decrease in the average selling price of cooking oil are Shurugwi which dipped from an average selling price of $1.95 to $1.80, Beitbridge from $1.98 to $1.95. The prices remained the same in the other districts. In Beitbridge, the decrease in the average price is because the commodity is readily available, and traders are lowering the prices so as to attract customers. In Umguza, cooking oil is now available, in contrast to the situation during the previous reporting period of end of ust where customers were being limited to purchasing one bottle per customer. The average selling price of kapenta decreased to $9.30/kg from $9.40/kg. Salt has remained available and the average selling price was $0.52/kg. The price of sugar remained at $1.07/kg from that of end-ust. 3. Cash Liquidity Situation For this period of mid-september, the cash liquidity situation seems to be gradually normalising. This is largely due to the fact there are now options such as e-purchasing and using the swipe facility, hence reducing the need for cash. However, the situation is yet to fully normalise and stabilise. It is important to note that during the reporting period, there has been a decrease in the number of beneficiaries travelling to major towns to cash out their entitlements. During the end of ust reporting period, the number of clients who reported that they travel to major towns was at 10% and in mid-september, this dropped to 8%. It is however, unpleasant to note that the average number of clients who failed to cash out all the money they wanted increased from 19% to 26% in mid-september. i. Ecocash Agents The average proportion of agents who were observed to be offering withdrawal limits significantly decreased from 55% to 45%. This was a noticeable decrease but however, agents still continue to face challenges with accessing cash. The decrease by the agents can be attributed to the fact that apart from the use of cash, there are other options in place such as e-purchasing where there may be no need for clients to use hard cash. 55% of the agents were not imposing withdrawal/cash out limits. The agents in all the provinces are still in a position to give out cash to their clients. The average maximum amount that is being offered by the mobile cash transfer agents is $225, while in mid-ust it was $575. ii. Clients 3

4 The number of clients who managed to cash out all the money they wanted at first attempt was 74%, a decrease from 81% during the end of ust reporting period. The reduction in the number of clients able to cash out all the money they wanted dropped mainly due to the increased demand for cash from the mobile cash transfer agents. Mobile cash transfer agencies continue to cite liquidity challenges, thereby forcing them to impose cash out limits on their clients. This is also made evident by the fact that the number of beneficiaries who staggered their cash outs increased from 8% to 13%. ii) The two tier regime of charging the cost of goods The project also inquired from the respondents about the two tier price regime in the operational districts. The initiative was considered as of paramount importance to keep observing after there were sentiments that some retailers and traders in some districts have since established a two tier price regime on the goods that they purchase, meaning that to buy a commodity such as maize meal, two prices were set, that is when buying using cash, and when using e wallet. There have not been any noticeable differences in terms of prices of commodities, whether using cash or the e-purchasing facility. Prices are still the same using either of the methods. The only extra charges are those that are known, which are the costs of cashing out, but not the cost of the commodities themselves. In Masvingo and lands provinces, the costs of the commodities are not being affected by the use of the e purchasing facility. In Shurugwi and Gokwe centre retailers are using the swipe machines so that clients do not just depend on cash only for purchasing. In Matebeleland North and Matebeleland South, the common scenario is that both the United States dollar and the South African Rand are circulating, hence traders and retailers tend to use exchange rates in selling their goods, and not to set two prices for the same commodity. In Umzingwane, the e purchasing services still remain unfavourable, to the trader, hence making the beneficiaries perform the cash out transaction first before they can purchase anything. 4

5 Prices in $ per unit Figure 1: Price Trends for staple cereals CTP Consortium: Prices of Staple Cereals Maize grain Maize meal Sorghum Millet Rice April April Sept 5

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7 Price (US$) Figure 2: Maize grain price trends for selected districts Maize Grain Price Trends per Kg for Selected Districts Nkayi Umguza Beitbridge Umzingwane Masvingo Rural Zaka Gokwe South Mberengwa Apri l Apri l ust ust Sept 7

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9 Figure 3: Maize Meal price Trends per Kg for Selected Districts 9

10 Prices in $ per unit Figure 4: Price Trends for Non-Cereal Foods Consortium: Prices of Non Cereal Foods Sugar beans Cowpeas Ground nuts (unshelled) Ground nuts (Shelled) Cooking oil Salt Sugar Kapenta (100g) April April Sep 10

11 %age of Responses Cashing Out Practices by Agents, Merchants and Clients Sept %age of Agents offering Cash Limits %age of Agents giving clients 100% cash needs %age of Clients cashing out all money they need Figure 5: Cashing out Practices by Agents and Clients 11