Key messages

• The truce - in effect since early April - resulted in much needed improved fuel supply and decreased armed clashes across the country during Q2-2022.
• Reduced levels of food assistance in Q2-2022 and high local food prices continue to drive severe food insecurity.
• High levels of global food and fuel prices and supply concerns as outcome of Ukraine-Russia conflict continue to negatively impact food systems in Yemen.

Summary

Food insecurity: Despite the truce, households in Yemen witnessed the worst food consumption gaps since 2018 and are facing more hardship in coping with food shortages than at any other point of time in the last three years. Half of all surveyed households reported lacking access to adequate food. Poor food consumption and the level of food-based coping strategies applied by households peaked during June. Key drivers are the impact of the ongoing macroeconomic crisis on households’ purchasing power, the continued reduction in humanitarian assistance and the elevated levels of food prices.

Humanitarian food assistance: Throughout 2022, WFP was compelled to reduce food rations, particularly in the fourth cycle, due to continued funding shortfalls, limited food stocks and logistics constraints. WFP started prioritising eight million people with reduced rations, while five million people in areas with highest needs received higher rations in each distribution cycle. By end-June, the 2022 Humanitarian Response Plan for Yemen was only 26 percent funded.

Conflict: The warring parties in Yemen agreed to the United Nations’ proposal of committing to a truce as of 2nd of April. As a result, Q2-2022 saw the second lowest quarterly civilian casualty count in the country since 2018. On the other hand, the Q2-2022 recorded the highest quarterly casualty count due to landmines and unexploded ordinance. This was largely because of the increased freedom of movement for people in areas where fighting had de-escalated, but that were not cleared of explosive remnants of warfare.

Exchange rate: In IRG-controlled areas, the riyal appreciated 34 percent in the immediate aftermath of the truce announcement as the market anticipated a two billion dollars deposit to the Central Bank of Yemen. Asthe deposit continued to delay, the riyal depreciated by 19 percent to reach YER 1,115/USD 1 by the end of June. In areas under Sana'a-based authorities, the currency appreciated by eight percent, reaching YER 557 to the dollar by the end of Q2-2022.

Fuel imports: Fuel supply significantly improved as the truce facilitated fuel ships to enter into Red Sea ports since April 2022. Consequently, in Q2-2022 the volume of fuel imports through northern ports superseded the volume of 2021.

Food imports: During the first half of 2022, food imports through Aden port decreased by 42 percent compared to last year. This is in part attributable to the ripple effects of the war in Ukraine and thus changes in sources and costs of food on the global market, the reduction of humanitarian food assistance, and high port handling and shipping charges diminishing importers’ margins. Meanwhile, the volume of food imports increased by 17 percent in the northern ports.

Global food and fuel prices: After reaching an all-time high in March 2022, the FAO Food Price Index remained at an elevated level throughout Q2-2022. At the same time, global fertilizer prices increased by nearly 30 percent compared to last year, while June marked the highest prices of global crude oil in the past ten years.

Fuel prices: In areas under IRG, the pump prices1 of petrol and diesel decreased by 15 percent and five percent respectively compared to Q1-2022, however remaining twice as high as the year before. In areas under Sana’a-based authorities, parallel market prices decreased by 45 percent for petrol and by 31 percent for diesel compared to the last quarter, while pump prices remained stable. This is largely attributed to the improved fuel supply following the truce.

Minimum food basket: The average cost of the MFB slightly decreased by six percent compared to Q1-2022 in IRG-controlled areas. Worryingly, it remained 77 percent above the level in 2021 when vulnerable households were already facing hardship in affording an adequate diet. At the same time, the cost of the MFB in areas under Sana’a-based authorities reached an all-time high of YER 8,891 per person per month in June 2022 after an increase of 13 percent during the first half of 2022 and of 38 percent compared to the previous year.