Reduced income and high food prices likely to drive Crisis (IPC Phase 3) during the lean season

Lesotho Remote Monitoring Update, August 2022

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Photo by veera jayanth on Unsplash

KEY MESSAGES

  • Stressed (IPC Phase 2) outcomes persist across much of Lesotho as households are starting to deplete own produced food stocks and rely more on the market.
    While poor households can still meet their food needs, some are diverting income from their basic non-food needs towards food. Crisis (IPC Phase 3) outcomes are expected to emerge in late 2022 as households are likely to be nearly completely market reliant, with reduced household purchasing power because of above-average food prices and below-average income.
  • The price of maize meal increased by 17 percent from June to July, reaching record levels, surpassing 2016 prices, when a severe drought hit the region. The rise in prices is due to reduced availability and generally high prices in South Africa, which are driven by high global prices. Meanwhile, sunflower oil prices increased sharply, by 16 percent, from June to July, reaching record levels. Average monthly food prices have risen consistently for the past 12 months. Sunflower oil prices registered the most significant (60 percent) year-on-year change among all food commodities.
  • In July, the annual inflation rate increased to 9.8 percent, a 1 percentage point increase from June and the highest level recorded since June 2009. The inflation rate is expected to continue to accelerate due to increases in staple foods such as maize meal and edible oil. The rise in prices reduces household purchasing power as poor households are depleting their stocks and beginning to rely on market purchases.
  • As preparations for the 2022/23 agricultural season begin, it is expected that poor households will begin to access more agriculture-related labor opportunities. However, due to reduced hiring power by better-off households because of reduced income levels from livestock sales, lower remittances, and high input prices, it is unlikely that these labor opportunities will reach typical levels. Poor households will likely have below-average income from agricultural labor.

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