Findings
The prices of wheat in Mozambique have been affected by the Russia-Ukraine war. This was expected as Mozambique imports most of its wheat from Russia and Ukraine, and the scarcity created by the war pushed prices higher. These trends were similar to those observed for world wheat prices over the same period. The changes in wheat prices were greater and faster in rural areas compared to urban markets underscoring the importance of internal trade in price determination.
Sugar prices went up significantly from March in Mozambique’s urban markets, which may partly be a result of the Russia-Ukraine conflict and its impacts, which included an increase in transport costs and a reduction in international commodity supplies as countries hoarded their stocks to smooth consumption. While rice prices exhibited a declining trend in urban markets, maize prices rose moderately in the two rural markets examined. Cooking oil prices, on the other hand, rose significantly in both urban and rural markets but more so in urban markets. These price hikes were attributable to the war, as Russia and Ukraine controlled the world’s sunflower oil trade, and their own trading volumes plummeted due to the war.
There were also significant increases in the prices of petroleum products and gas in rural and urban markets, similar to the increases observed in world prices for these commodities, implying that the war influenced these price changes in Mozambique’s local markets. Among the fuels, gas increased the least (8% to 11% in all markets), followed by petrol (19% and above) and diesel prices rising highest (over 26%).
Recommendations
It is essential to keep food trade open in order to facilitate household access to stocks of those commodities from within and outside Mozambique as well as limit any negative effects of the Russia-Ukraine conflict on the economy in general and the poor more specifically.
It would also be useful to enhance social protections by developing and strengthening programs that support consumers and vulnerable households by providing safety nets, as was done during the most critical period of the COVID-19 pandemic.
To limit the effects of the Russia-Ukraine conflict from persisting for many years, Mozambique could step up programs that support farmers in increasing future production and offset the effects of the war on food prices. In this regard, increasing general funding to agriculture, improving prioritization of the sector, and avoiding pilferage of its allocations, can increase productivity and enhance the dynamic resilience of households in Mozambique.
Year of publication | |
Authors | |
Publisher | AKADEMIYA |
Geographic coverage | Mozambique |
Originally published | 06 Mar 2023 |
Knowledge service | Metadata | Global Food and Nutrition Security | Food security and food crises |
Digital Europa Thesaurus (DET) | war in Ukraineagricultural marketagricultural tradecerealsprice of agricultural produceprice of energyinflationsocial protectionAid to agriculturepolicymaking |