Business

Wheat imports cause Yemen heavy losses

National Yemen

Yemen receive donation of Wheat

By Jihan Anwar

Increased international market prices for wheat cost Yemen approximately YR 50.8 billion in increased import costs in 2011. While the quantity imported remained at 2.68 million tons, charges for the imported wheat increased from YR 154.8 billion to YR 205.6 billion in 2011, according to the Central Statistics Organization.

With low rainfall and poor water management, an undeveloped agricultural sector and a growing population, Yemen is heavily dependent on food imports.

The country imports up to 75% of its food from outside. Specifically, Yemen imports up to 90% of its wheat and 100% of its rice.

Yemen wheat imports have increased from 2.3 million tons in 2007 to 2.8 tons in 2009. Because of its heavy reliance on external imports, and food imports in particular, the country is extremely sensitive to international price fluctuations.

When food prices rise worldwide, or when a drought hits countries Yemen imports food from, it is as though Yemen itself is experiencing a domestic food shortage crisis.

In 2011, the national production of wheat was estimated to be a meager 236 thousand tons. Moreover, the United Nations Food and Agriculture Organization estimated that for 2013, cereal production is 8% below the 2012 level.

A recently published report cited by Al-Thawra Newspaper highlighted that Australia was the number one wheat provider for Yemen in 2011; the United States came in second. According to statistics from the Central Statistics Organization, wheat imports from Australia to Yemen accounted for 26.6% of staple imports for 2011.

The distance between Australia, the U.S. and Yemen also translates into high hydrocarbon expenditures for the transport ships, which is reflected in the price of staple products which are sold to Yemen.

In 2008, the World Bank found that international food prices had risen by 75 percent since 2000, while wheat prices increased by 200 percent. Moreover, World Food Programme (WFP) market updates have indicated that in 2013, global wheat prices have continued to rise and will likely cause prices to soar in local markets.

As it is, increased prices have already strained household economies in Yemen, and especially in rural areas. The recent crisis has exacerbated the unemployment level, which has led to a further tightening of household budgets.

The buying power of Yemeni consumers has already been pushed to its limits. In 2005, the World Bank’s Household Energy Supply and Use in Yemen study found that average income families spend 55% of their incomes on food, water and energy. In a low income household, the percentage may reach 70%.

The situation is believed to have significantly worsened in recent times. A CAP Project report by Mercy Cops highlighted the fact that peoples’ need to borrow to afford food led to 37% of all Yemeni households having food-related debt. 80% of households in Lahj have been reported to have food-related debt.

“This cycle of borrowing money and increasing debt is not initiated to buy higher priced items such as meat in food insecure households but to simply afford the staple food items like wheat flour,” read the CAP paper. In fact, demand for products such as milk and meat have decreased countrywide since having become too expensive for average consumers.

To make things worse, since 2011, the size of loaves of bread made by bakeries has reportedly diminished; meanwhile, the price of loaves have either remained the same or doubled. Bakeries have justified the practice as being a response to increased international fuel and wheat prices. Households have consequently tended to consume smaller meals and/or have spent higher amounts of money on food purchases. This is particularly critical point, as Yemen has a chronic malnutrition rate of 58%, second only to Afghanistan.

A 2012 UNICEF SMART study estimated that nearly 10 million people in Yemen are food insecure and about one million children under the age of five suffer from acute malnutrition.

Even though wheat requires a relatively small amount of water to grow, wheat production in Yemen is of a very limited quantity and is usually only for the producers’ consumption or for external trade. In the past week alone, seven thousand tons of wheat was exported to Egypt from Yemen.

 

1 Comment

  • It's crazy how Yemen has plunged like it has today. I was there for a year – two years ago – and all they care to grow is the pathetic shrub of "gat". My grandfather was telling me of the days where they did not have to rely on currency and lived off of what they produced and farmed. Ohhhh ya Yemen… what have you done!! Why are becoming so dependent on these countries and forgetting that you are an AGRICULTURAL country — live off of your lands!