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Price of freedom: S. Sudan sees food costs rise

By Maggie Fick
Associated Press / January 24, 2011

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JUBA, Sudan—Residents across Southern Sudan are in a jubilant mood after what appears to be a landslide vote to secede from the north and to create the world's newest country.

There's one side effect of this month's weeklong referendum, though, that people are not cheering: higher prices.

Merchants and customers are complaining of price hikes over the last several weeks as the prices of some every day goods like sugar, soap and cooking oil have increased by more than 50 percent.

Christine Aman has four children and a husband to feed. On a shopping trip to Juba's main market last week she carried bags full of onions and greens, but she's buying less. Sugar, she said, has doubled in price since Christmas.

"Now we have less to eat," the 26-year-old said.

One factor in the rise in prices is the reduction of imports from north Sudan related to the independence referendum. In addition, hundreds of thousands of southerners who once lived in the north are streaming back south, putting pressure on supplies.

"In Juba, we find that many shops run by northerners are closed, the traders have gone back," said Martha Anthony, a statistician for the southern government. He said some Kenyan and Ugandan merchants also left for the voting period.

One other factor is that the government in Khartoum, the capital of Sudan, removed sugar and fuel subsidies earlier this month, raising prices across the country.

At least 180,000 southerners living in the north have returned since October, initially to register to vote in the Jan. 9-15 referendum and later out of fear of reprisals by the Khartoum government after the vote. The U.N. expects another 100,000 returnees by early March. Ballot returns show the south voted overwhelmingly for independence.

"With referendum uncertainties, the grain supply from northern Sudan and to a lesser extent from Uganda and Kenya has reduced substantially," said Andrew Odero, who analyzes food insecurity for the World Food Program. "Grain stocks are declining in some border areas, leading to increased prices, which are also under pressure from returnee arrivals."

Odero said the World Food Program expects that prices will continue to increase and could lead to an increase in those needing food aid.

Onno Van Manen, the country director of Action Against Hunger, said a "reasonable" harvest this year of wheat and sorghum has lessened the severity of a potential food crisis, but he noted the rise in prices.

"It's too early to say, but with the population increasing in size ... we anticipate that we may have to respond to an increased caseload," said Van Manen.

Sudan's currency, called the pound, has dropped in value versus the dollar, further pressuring prices.

David Butter of the London-based Economist Intelligence Unit said there is not yet enough data to take a definitive view on the price inflation, but that demand increased as wholesalers, retailers and households stocked up on necessities before the referendum.

"Southerners are likely to be concerned that prices in the future will be pushed up by uncertainty about the continuation of subsidies and about the currency, whether that be the Sudanese pound or a new currency that may eventually be issued by the southern government," said Butter.

The macroeconomics of the situation aside, Rosa Edia, a 32-year-old mother of five shopping in Juba's main market last week had to spend extra time haggling to get the prices of goat meat lower. She did not succeed.

"I've noticed the price increases," Edia said. "Now I have to buy less meat, so I try to add more vegetables."