In July, the general CPI increased by 1.8% driven by food inflation (+4.2% from June 2012). The wholesale prices of wheat and wheat flour have further risen during the month of August 2012 by 8.5% and 1.5% compared to the month before. These trends are partially driven by price transmission from the global wheat market during the quarter. In August 2012, the terms of trade of casual labourers improved as opposed to pastoralists. The ToT between wage and wheat flour have improved by 10% on average. In Hodieda, it remained stable whilst in all other markets it has improved, ranging from +6.7% in Amran to +37.4% in Sana’a. During the same period, the average sheep/wheat flour ToT dropped, ranging from -2% in Amran to -39% in Hajja, although a slight improvement was recorded in Sana’a (+2%). The deterioration of the pastoralists’ purchasing power is mostly due to a decrease in the average price of sheep in August.