Reference Date: 19-December-2022

Above‑average rainfall amounts forecast for 2022/23 cropping season

Planting of the 2023 season cereal crops, primarily rice, started in November and is likely to finish in January. Following moderate early season rainfall deficits in parts of the main rice producing northern regions, weather forecasts for the December‑2022 to March 2023 period point to an increased likelihood of above‑average rainfall amounts throughout the country, underpinned by the ongoing La Niña event. These forecasts portend to generally beneficial conditions for the 2023 cereal crops for the remainder of the season. In southern regions, which suffered multiple years of drought, the predicted rainfall amounts raise the likelihood of a potential upturn in cereal production in 2023, but harvest outcomes will still be constrained by the high prices of inputs and low income levels that are expected to contribute to a below‑average planted area. Weather forecasts point to an average number of cyclones in 2023, maintaining the risk of floods and wind damage to food crops.

Rice harvest above five‑year average in 2022

For a second consecutive year, rice (paddy) production in 2022 is estimated at an above‑average level of 4.6 million tonnes, mostly reflecting conducive weather conditions in the key rice producing central and northern regions. Maize production, with crops mostly grown in southern regions, is estimated at a level below the five‑year average, reflecting the impact of drought conditions and the passing of several tropical cyclones between January and February 2022. The cyclones caused damage to food crops worth an estimated USD 140 million in southeastern regions, according to an FAO assessment from March 2022.

Adequate national rice supplies in 2022/23 marketing year

Reflecting the above‑average paddy crop harvested in 2022, national supplies are estimated to be satisfactory during the 2022/23 marketing year (April/March). Compared to the previous year, import requirements of rice are estimated to decline slightly to a below‑average level of 540 000 tonnes.

Inflation rate up on increased import costs

The annual inflation rate was estimated at 10 percent in October 2022, up from 6 percent in the corresponding month of the previous year. The upturn largely reflects high prices of imported products, owing to elevated global commodity prices and a weakening national currency since mid‑2022 that intensified the spillover of the higher global prices to the domestic market. Prices of rice, the key food staple, only increased by 4 percent year‑on‑year in October, in part reflecting the adoption of a price ceiling by the governmnt in April 2022. In addition, the subdued prices were supported by the above‑average domestic production as well as the stability of international prices, especially when compared to global benchmark prices of wheat and maize that surged earlier in 2022. To stem inflationary pressure, the government raised its key policy interest rate to 10 percent in October 2022, up from 7 percent in October 2021.

Food insecurity worsens in southern regions

According to the latest Integrated Food Security Phase Classification (IPC) analysis released in November 2022, about 2.23 million people are projected to face IPC Phase 3 (Crisis) and above levels of food insecurity, including 0.3 million people in IPC Phase 4 (Emergency), during the first quarter of 2023. The estimated number of food insecure people represents 40 percent of the analysed population in southern and southeastern regions, and, compared to the previous year, this number has almost doubled. The worsening of the food securtiy situation is primarily due to the impact of multiple years of weather shocks that resulted in low harvests, disruptions of livelihoods and reduced incomes, limiting the coping capacity of most houeholds.

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