Fuel prices could affect harvest benefits, says FEWS Net

While increased rainfall in Eritrea should bring about higher crop yields this year, recent hikes in fuel prices may undermine the benefits of the harvest, a report said on Wednesday. "The expected harvest is likely to improve the food security situation by increasing the flow of fresh food commodities into local markets, which most likely will lower the price of major agricultural products," the US-funded Famine Early Warning Systems Network (FEWS Net) said in its food security update in September. The report cautioned, however: "The recent rise in fuel prices has exacerbated households' food insecurity and could counteract the impact of the expected harvest on household security." The most recent price rise for fuel in Eritrea was in August, when the cost of petrol increased from 32 Eritrean nakfa (US $2.13) to 38 nakfa ($2.53) per litre. Eritrea is one of the world's most food aid-dependent countries. After a poor harvest in 2004, an estimated two-thirds of its 3.6 million population was in need of varying levels of food support. A better harvest is expected this year following good seasonal rains, and there are plans to cultivate 550,000 ha -- 23 percent more than in 2004. "The kremti [main] rains are almost over, and their performance has been the best in recent years, which could translate into better harvests," the report said. In August, the United Nations Office for the Coordination of Humanitarian Affairs said despite a good main rainy season so far after five years of drought, Eritrea would need food aid throughout 2006. Aid workers cautioned that labour shortages, flash floods and locust infestation could reduce the crop yields. "The complete eradication of locust outbreaks has not yet been possible," the FEWS Net report observed. "However, there has not been substantial damage reported on crops so far." The US has been the largest donor of food aid to Eritrea over the last five years, providing some 774,679 tonnes of food. The country announced in June that it would cover all of Eritrea's estimated cereal requirements for 2005.