31 janvier 2023

In the central Somali city of Adado, a cup of tea becomes a luxury

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Due to the escalating expense of life in the central Somali town of Adado, where the cost of necessities has risen, Salado Ibrahim Ali is about to close his tea shop. The price of sugar has increased from $30 to $47 per 50 kg, a significant increase due to inflation, according to Salado.

After fighting between the Somali army and Al-Shabab started, Salado's family relocated from Ado-kibir to Galgadud, 65 kilometers east of the capital, to Adado late last year. She charges $0.15 for a cup of tea and claims she can't charge more since everyone is feeling the squeeze and she wouldn't get any business. She used to make $5 to $6 every day, but over the past three months, business has drastically decreased. Salado has been purchasing sugar on credit from a relative's store since May, and he currently owes $230. She has no clue how she will be able to pay off this loan given the circumstances. "My house's rent is now $75 because I haven't paid it in the previous three months. I occasionally consider moving into an IDP camp since no one would require me to pay rent there "Salado informed the local reporter for Radio Ergo that he was upset.

Salaried employees in Adado have been particularly affected by the rise in living expenses. Mason Abdinoor Mohamed Abdulle explains. "We still make between $12 and $14 per day, despite the fact that the cost of essential necessities has increased. Food prices have soared, along with clothing and charcoal prices (for cooking), "He claims. Abdinoor is shocked to learn that his family's monthly expenses have increased to $350 from their previous $250 level.

Everyone in Adado town shares the same inflation-related anecdotes and complaints. The perception among drivers is that they are most impacted by inflation. Taxi driver Said Bashir claims that the fare he charges only just covers gasoline costs. He laments, "I labor all day and what I make is not even enough to cover petrol." Said, who is a father of five children, claimed that although his family's food consumption has not changed, their daily costs have gone from $4 to $7. "I used to split my income into three categories: savings, everyday costs, and transportation. I now owe $800, so forget about savings "He bemoans.

Sugar prices are supported by crude oil, which is still at high levels. For the sugar market, inflation and rising production costs (such as those for energy, fertilizer, refining, and transportation) are supportive.


India also provides more encouraging signs. Despite the fact that India has shipped a lot of sugar to the international market this season, the Indian government has set a 10-million-ton cap on sugar exports for the years 2021/22 (October/September). The goal is to guarantee domestic accessibility and preserve local market price stability. A sugar export ceiling to India of around 7 mmt for the next marketing year 2022–2023 is being discussed.

Brazil's high level of uncertainty is also a factor in this positive outlook. In the upcoming months, the sugar balance and prices will be largely determined by the final composition of Brazilian sugar output, which is less certain than ever. The Senate in Brazil approved a reduction in the price of gasoline. As a result, ethanol is less competitive and prices are under pressure immediately. Brazilian producers are favoring sugar production over ethanol because of this circumstance.



© Photos Credits : La Depeche