FEWS NET Monthly Report for Honduras covering the period Nov 2006 to Dec 2006.
HONDURAS Food Security Update December
2006
ALERT STATUS: NO ALERT WATCH WARNING EMERGENCY
Summary
Food and nutrition security is stable in the short term. The postrera harvest will begin in mid or late
December, and, according to Instituto Nacional de Estad?sticas (INE, National Statistics Institute) forecasts, it will be higher than last year's harvest for both maize and beans. Production by
poor rural households, who produce for their own consumption, is not expected to be as good as national production, but is expected to provide sufficient maize and beans for household consumption
until February or March.In the coming months, the domestic supply of maize for consumption could decrease. High international maize prices could decrease imports, encourage agroindustrial
consumption of national maize production and increase the consumer price. This would cause stress on food security, especially for poor households. The stress could become a crisis during
the hunger season, which normally begins around the end of March and beginning of April and continues until August.
Seasonal calendar
Current
hazards
International maize prices are high and increasing.
Maize shortages may occur in local, regional and national markets.
Slug plagues
have affected an area of approximately 210 hectares (300 manzanas) of beans.
Food security situation
Production of maize in the primera season of 2006/07 totaled 397,000 MT, 2.9 percent higher than production during the
same agricultural cycle of the previous year. It is expected that the postrera production for 2006/07 will reach 94,000 MT, bringing the total 2006/07 production to 491,000 MT, 5.3 percent
higher than national production in the 2005/06 agricultural cycle.The international maize price increase in the last few months was substantial: in just three months it increased 50 per
cent. The main cause of this increase is increased demand for maize as an input for ethanol production (see Figure 1). This price increase has several impacts on the Honduran household
economy. On the positive side, increased revenues from the sale of household production benefit producers. However, increased internal maize prices have a negative impact on household
access. Maize is a basic food in the diet, and is also an important input in the dairy, pork and poultry industries. Maize price increases will increase the cost of chicken, pork and dairy
products (to different degrees), which will affect the price of the basic food basket.Figure 1: Maize prices in US$ per ton, Chicago Market, USA
Source: Chicago Board of Trade, December 2006The concentrates and flour industries
may also not import maize due to its high price and will use national production as raw material. As a result the maize supply could be lower than the demand, and cause a significant increase in
the consumer price.Poor households purchase approximately 80 percent of their food, but most rely on household production as well as they are not able to afford the entire basic food basket
with their household income. An increase in the price of maize would have a significant impact on the food security of most of the poor households, as maize is the base of their
diet.According to the INE, per capita consumption of maize is 166.6 grams per day. In order to provide for this level of human consumption, 433,000 MT of maize are required per
year. In addition, for the 2006/07 cycle, the processed food industry, such as production of concentrates for animal consumption, will have a demand of approximately 454,000 MT. The
projected total consumption for the 2006/07 cycle is thus approximately 887,000 MT. According to INE, 54 percent of this demand will be supplied by national production and 39 percent with
imports from the U.S., resulting in a 7 percent deficit that in normal years is supplied with more imports. According to the Asociacion Hondure?a de Productores de Alimentos Balanceados
(Association of Honduran Producers of Nutritionally Balanced Foods), due to the significant increases in the international maize price, the imports for the 2006/07 cycle could be reduced by 20
percent, increasing the deficit to up to 14 percent (see Figure 2).Figure 2: National maize balance, 2006/07
Source: National Statistics Institute, November 2006; Association of Honduran Producers of
Nutritionally Balanced Foods, December 2006; FEWS NETThe Secretaria de Agricultura y Ganaderia (Agricultura and Livestock Secretariat) is planning to support the apante (third) sowing of
maize in order to reduce this deficit's impact on food security of the poorest households.According to INE's November 2006 Basic Agriculture and Livestock Survey, national bean production for
the 2006/07 cycle will be 17 per cent lower than that of the 2005/06 cycle. The bean per capita consumption is 38.1 grams per day, which produces an annual national demand of approximately
89,000 MT. For the 2006/07 cycle, the national production will supply 73 percent of this demand. INE has projected bean imports of 10,000 MT that will supply 10 percent of the demand, but
a deficit of 17 percent will remain (see Figure 3).Figure 3: National bean balance, 2006/07
Source: National Statistics Institute, November 2006; FEWS NETThis bean deficit may
be reduced by the surplus from the previous harvest cycle, which according to the INE is substantial. In this case, the impact on food security of most households would be decreased.
However, this deficit could also increase once the damages produced by the slug plague in the crops are accounted for, especially in livelihood zone 15, which contributes approximately 22 percent of
national production. In this case, the impact on food security would be higher in the majority of households, mainly from April to August 2007. Consumer prices could then increase,
reducing poor households' access to beans.
Prices and
markets
Approximately 100,000 small coffee producers have benefited from the recent increases in the international coffee prices. In September, coffee was
quoted at US$2,407 per metric ton in the New York Board of Trade; in November it reached US$2,722 in the same market, with an upward trend in December. These prices and trends guarantee coffee
producers' access to food, and also provide income necessary to hire more than 15,000 families whose main source of income is the sale of their labor in activities related to coffee production,
especially from October to March.During the last weeks, there has been a strong speculation about price increases in consumer prices for the basic food basket. The monitoring carried out
by the Sistema de Informaci?n de Mercados de Productos Agr?colas de Honduras (Honduran System of Information of Markets of Agricultural Products) reports that with the exception of sugar, such
increases have not occurred.
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