The month-on-month inflation remains steady around 20% throughout the third quarter of the year. In August 2012, fuel prices declined both on a month-on-month and on a year-on-year basis, the first drop occurred in diesel prices in the past four years (-4.6% compared to August 2011). The terms of trade (ToT) of shoat-to-cereals declined during Q3-2012 compared to the previous quarter both in Dire Dawa (-5.1%) and Jijiga (-7.9%). These trends are mainly driven by a quarterly increase in sorghum prices in Dire Dawa (+14%), and an overall increase in the prices of the most consumed cereals in Jijiga (maize, +20%; sorghum, +14%; wheat, +18%). However, increased demand for livestock from the Gulf countries and from local markets in September is likely to mitigate the overall adverse effect on pastoralists’ purchasing power.
October 2012