MARKET SURVEY FOR ESSENTIAL HYGIENE ITEMS

KURDISTAN | IRAQ REPORT

July 2014

Acknowledgements The Norwegian Refugee Council wishes to thank UNICEF, Save the Children, ACTED and the International Rescue Committee (IRC) for their active support in this survey. Disclaimer “This document has been produced under a partnership agreement between the Norwegian Refugee Council (NRC) and the United Nations Children’s Fund (UNICEF). The views expressed herein should not be taken, in any way, to reflect the official opinion of Unicef”

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Contents

Contents .................................................................................................................................................................................................... i

Figures ....................................................................................................................................................................................................... i

Abbreviations and Acronyms .............................................................................................................................................................. ii

Executive Summary ........................................................................................................................................................... 1

1.0 Introduction .............................................................................................................................................................. 2

2.0 Key findings .............................................................................................................................................................. 5

3.0 Conclusion / Recommendations ....................................................................................................................... 11

Annexes .................................................................................................................................................................................................. 13

1. Terms of Reference (ToR) ............................................................................................................................................................. 13

2. Survey location map ........................................................................................................................................................................ 14

3. Survey form ....................................................................................................................................................................................... 15

Figures

Figure 1: Household item usage for NICEF hygiene kits in Domiz camp (NRC PDM data) .................................. 2

Figure 2: Benefits and Challenges of direct hygiene kit provision ................................................................................. 3

Figure 3: Market functionality ....................................................................................................................................................... 6

Figure 4: Source of supply ............................................................................................................................................................... 7

Figure 5: Current price dynamics for hygiene items ............................................................................................................ 8

Figure 6: Future price dynamics (assumed)............................................................................................................................ 9

Figure 7: Basic market map / market dynamics ................................................................................................................. 10

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Abbreviations and Acronyms

AOGs Armed Opposition Groups

EMMA Emergency Market Mapping and Analysis

ISIS Islamic State in Iraq and the Levant

IDP Internally Displaced Person

NRC Norwegian Refugee Council

PDM Post Distribution Monitoring

UNICEF The United Nations Children's Fund

WASH Water, Sanitation and Hygiene

ToR Terms of Reference

1

Executive Summary

Background Since early June 2014, over 500,000 people from Iraq have been displaced from the conflict between the Iraqi government and militias allied with the Islamic State in Iraq and the Levant (ISIS). Approximately 300,000 of these Internally Displaced Persons (IDPs) have fled to the Dohuk and Erbil districts of Kurdistan, adding to the existing humanitarian caseload of refugees in camps and settlements from the Syria crisis. With support from UNICEF, a number of NGOs including NRC have been distributing hygiene kits to refugees and IDPs. While the direct distribution of these materials by NGOs have offered refugees and IDPs rapid access to necessary hygiene items, market based approaches may be a more cost effective way of addressing the needs of displaced people for hygiene materials. To support this hypothesis NRC, UNICEF and a number of other WASH cluster partners undertook a rapid market assessment in July 2014. This assessment was undertaken in Dohuk governorate and surrounding areas in Northern Kurdistan. For this survey, four essential hygiene items were identified by focus group discussions and through interviews with local market vendors. The essential items assessed included bar soap, sanitary napkins, shampoo and laundry detergent.

Key findings Supply: There is some reduction in the supply of goods through Mosul from

Baghdad (mainly food).

Supply: There is a mostly free movement of goods from Turkey with the border functioning normally.

Supply: There is a good supply of hygiene items in shops.

Supply: Small traders lack storage capacity to increase supply if needed.

Prices: Prices have not changed considerably for hygiene items.

Fuel shortages: Recent fuel shortages have affected more at the consumer level. More so than transporting of goods in most cases.

Demand: There has been some increase in demand for hygiene items, due to the influx of IDPs and refugees.

Demand: Some of the host community have reduced purchasing power due to of government employees not receiving their salaries.

Conclusions To date, markets in Dohuk have shown resilience to the conflict in other

areas of Iraq.

The influx of IDPs and refugees have increased demand for certain items whilst from the market perspective helped mitigate the reduced purchasing power of host communities due to non payment of salaries.

The market can sustain the demand for hygiene items whilst being able to meet increased demand for key items (for both camp and non-camp).

NRCs PDM data for the hygiene kits shows the rationale to change how hygiene kits are provided.

This market survey shows that a market-based approach to hygiene item provision is feasible.

Recommendation This survey shows that is feasible to provide hygiene kits through a market based approach. It is therefore recommended to UNICEF and other NGOs involved in hygiene kit distributions to consider voucher-based means of assistance.

Feasibility factors Current Future

Supply

Demand

Prices Monitor - insecurity / borders

Accessibility

External factor: Insecurity Monitor – insecurity / borders

External factor: Fuel availability Monitor - insecurity

Quality

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1.0 Introduction

1.1. Current context Since the capture of the Iraqi city of Mosul (population 2.5 million) on 10 June 2014 by the Islamic State of Iraq and the Levant (ISIS) and affiliated armed opposition groups (AOGs), and the seizure of large areas of territory in northern and central Iraq in the following weeks, hundreds of thousands of people have been forced to flee their homes. Approximately 500,000 people were displaced within the first week of fighting, and considerable displacement has continued throughout June and July.1 Approximately 300,000 of these Internally Displaced Persons (IDPs) have fled to the Dohuk and Erbi districts of Kurdistan, adding to the existing humanitarian caseload of refugees in camps and settlements from the Syria crisis. This survey was initially intended as a response to the influx of refugees but was widened to include the areas where there has also been an influx of IDPs.

1.2. Survey Rationale Water, Sanitation and Hygiene (WASH) actors in response to the IDP and refugee crisis have been distributing hygiene kits in and outside of camps. For refugees the distribution of hygiene kits began in January 2014 in Bajed Kandala and June 2014 in Domiz. While these kits can provide new arrivals with essential items, they are not the only way to provide essential hygiene items. The Norwegian Refugee Councils (NRCs) Post Distribution Monitoring (PDM) data has show that there are a number of challenges with the current system of providing hygiene items. The Figure below for example shows that not all items are used/needed:

Figure 1: Household item usage for UNICEF hygiene kits in Domiz camp (pre-July distributions2) (NRC PDM data)

1 REACH (2014) Vulnerability, Needs and Intentions of Displaced Persons in Northern Iraq 03/07/2014

2 Current hygiene kits may have a different contents

0%

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Detergent Shampoo Soap Femalesanitary

towel

toothpaste tissuepaper

towel safety pin

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The current challenges and benefits of direct hygiene kit distribution identified by WASH actors in Kurdistan include:

Figure 2: Benefits and Challenges of direct hygiene kit provision

UNICEF’s Communications for Development (C4D) Team in Dohuk expressed an interest in exploring alternatives to direct distribution of hygiene kits to displaced peoples. As part of an ongoing partnership agreement between UNICEF and NRC, NRC agreed to undertake a market survey of essential hygiene items using methods developed in the Emergency Market Mapping and Analysis (EMMA) toolkit.

1.3. Survey background The survey was undertaken in Dohuk governorate and surrounding areas in the following locations:

See map in Annex 2 for geographical spread. In total 135 surveys4 were undertaken with shops of different sizes5 in all locations listed above.

Survey limitations: Not all shops were open at the time of the survey due to Ramadan.

3 Domiz refugee camp

4 See survey format in Annex 3

Benefits Challenges

Promotes good hygiene practices, such as hand washing.

Provides essential hygiene materials during critical periods of displacement.

Can ease financial burdens of households.

Builds confidence between NGOs and beneficiaries.

All families are different; the kits may not meet the needs of all families.

The kits do not take into account family size.

The kits do not take into the preference of beneficiaries

Certain households require more of certain items (i.e. sanitary napkins)

Complex supply chain of procurement, packing, storage and distribution.

Not all items are the quality that beneficiaries expect.

Some items included in the kits do not have a clear link with promoting good hygiene practices.

Creates dependency

Undercuts local market sales

1. Domiz (camp3 and urban). 8. Sheikhan

2. War city 9. Yaskor

3. Dohuk city 10. Garmawa

4. Amedi 11. Kalackchy

5. Sheldze 12. Akre

6. Diralok 13. Zakho

7. Bardarash 14. Sumeel

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Not all traders were willing to participate citing either they were too busy or had been approached by NGOs in the past for information.

Large geographical area to cover.

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2.0 Key findings

2.1. Hygiene items

2.1.1. Soap Top 3 brands sold 1. Duru 2. Lux 3. Dove Demand for items High 42% Same 48 % Low 10% Other points

Restocking time depends on shop size. Restocking of items daily to every couple of weeks depending on demand.

Largest challenge for smaller suppliers is lack of storage.

There is no major supply problems with this item (only 7% of suppliers noted there was a supply problem)

One trader noted the fuel shortage affects his ability to supply this item

Current stock holdings depends on shop size and storage capacity.

Soap is sourced locally via wholesalers or from Turkey via Zakho

2.1.2. Sanitary Napkins Top 2 brands 1. Comfy 2. Always Demand for items High 56% Same 33% Low 11% Other points

Restocking time depends on shop size. Restocking times from daily – monthly.

There is no major supply problems with this item (only 11% of suppliers noted there was a supply problem). As with soap and other items, smaller shops have limited storage capacity.

Current stock holdings depend on shop size and storage capacity.

2.1.3. Shampoo Although beneficiary feedback showed an interest in children’s shampoo and/or specialised shampoo for

treatment of head lice, the survey teams focused on the availability of regular shampoo.

As with other items there are no major supply problems and most supplies can restock on a daily or weekly basis.

Demand for shampoo is slightly higher than average. Vendors report this is due to the increased demand from IDPs and Refugees.

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2.1.4. Laundry Detergent Large variation in brands sold, no top 3 brands.

No major supply issues. Most traders able to restock on a daily or weekly basis.

As with the other hygiene items surveyed demand for detergent is higher than average. As above vendors report this is due to the increased demand from IDPs and Refugees.

2.2. General market dynamics

2.2.1. Function 69% of the traders surveyed noted that the market was functioning normally. Of the 31% of the traders who said the market was not functioning normally, they cited the following reasons:

Figure 3: Market functionality

Current insecurity The current situation has affected the payment of government salaries as well as increased pressure on the job market. Many traders noted as in Figure 3 above that customers had reduced purchasing power as a result. It was also noted in many cases that in the influx of IDPs and/or refugees had helped to fill the shortfall caused by the reduced purchasing power of host communities. This survey did not assess the purchasing power of refugees or IDPs.

As noted above 69% of traders reported the market was functioning normally, however when asked directly had the recent conflict in Iraq affected their business 44% of traders said it had. The reasons as noted in Figure 3above, were noted again as key reasons. Also goods that were sourced from Mosul and Baghdad had reduced in quantity with a higher cost of transporting supplies.

However, for the sake of this assessment the main goods that were affected by this were food stuffs and not of the 4 selected hygiene items. The only hygiene item affected was baby diapers.

Traders reported transporters having to pay a form of “informal tax” to transport goods in ISIS held areas.

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45%

Non-payment ofsalaries

Current situationin Iraq

Lack of jobs /unemployment

Ramadan Weak market

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Fuel shortage The benzene fuel6 shortage occurred in June during the early stages of the Mosul crisis. The situation has

stabilised somewhat but the cost of benzene fuel initially increased from 500 Iraqi Dinar per litre to 1200 Iraqi Dinar at the peak of the shortage, then later dropped to 850 Iraqi Dinar per litre.

When asked directly 59% of traders noted that the recent fuel shortage had affected their business.

As the fuel shortage only affected petrol and not diesel, meaning there was also a reduction in population movement. The survey team noted that at the consumer level movement dropped as people were unable to purchase fuel for domestic car use and increased cost for the use of public transport.

None withstanding the points above, only 11% of traders noted their sales had decreased, with 10% having increased sales.

Some traders noted that people as result of the fuel shortage are using smaller local shops more. Prices in these shops might be slightly higher than supermarkets, but this cost is outweighed by the increased cost to buy fuel.

2.2.2. Supply and demand As noted in section 2.1 demand for hygiene items has increased slightly. Some traders surveyed noted

this was because of the large number of IDPs and/or refugees.

Purchasing power for government employees has decreased as salaries have not been paid as a result of the current insecurity. For some traders the decrease of host community purchasing power has been overset by increased demand from new arrivals.

Over 90% of traders surveyed stated they could increase supply if required, but smaller traders lack storage/warehousing to store large stocks of items.

Lack of storage is somewhat mitigated by being able to buy items locally and when needed. Figure 4 below shows the source of where traders buy their supplies. For traders inside the camp all items are sourced from around the camp.

Shops in Domiz camp are legally registered to operate with the local authorities, but do not pay sales tax on goods.

Figure 4: Source of supply

6 Benzene = petrol

0%

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Dohuk Importdirectly

OtherKurdistan /

Iraq

Domiz camp Domiz urban

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2.2.3. Prices 11% of traders surveyed said prices had increased. Basic estimates are around price increases of less

than 10% (However this prices vary between locations; price increases are higher in areas further away from Dohuk).

The survey team noted that prices in Domiz camp were lower compared to the surrounding urban areas. This was noted to be due to shops in the camp not having to pay rent, and other minimal overhead costs. In the camps it is estimated that some prices could be 10 – 20% cheaper than outside of the camp in the surrounding areas.

Current prices As seen in Figure 5 below the reasons that prices have increased include an increase in the wholesale price, increase in fuel or transport difficulties, fluctuations in the USD / Iraqi Dinar exchange rate or as a result of the current situation in Iraq. It is estimated roughly prices have increased around 10 – 15% outside of camps.

Figure 5: Current price dynamics for hygiene items

Future prices Traders where asked if they think prices of hygiene items will increase in the next 60 days. Only 21% thought that prices would increase due to the reasons show in Figure 5 below.

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Current situation Increase inwholesale price

Increase in fuel /transport cost

Exchange ratefluctuation

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Figure 6: Future price dynamics (assumed)

It is estimated that prices will not increase by more than 10 – 15%, as demand for items is high as well as a number of different supply routes for key items. However this will need to be carefully monitored, especially if there are recurrent fuel shortages and/or a large escalation in violence. As long as there is a free flow of goods from Turkey and other areas, supply and prices should remain relatively stable.

2.2.4. Credit Credit to consumers 73% of traders offered credit to their customers

Credit in most cases is offered on the basis of trust and knowing the customer. This in many cases means IDPs and refugees could not access goods on credits outside of camps. However inside of camps the majority of traders interviewed offered credit to their customers.

Linked to the point above there were some cases on IDPs moving locations and not repaying their debts.

Terms of credit varied from weekly to monthly repayments. Monthly repayments coincide with salary payments. However as noted above government salaries have not been paid, with traders reporting some customers have not been able to pay back their credit.

Credit from suppliers Around 56% of suppliers outside purchase goods on credit from larger suppliers or wholesalers,

compared to 40% inside Domiz camp. Terms of credit were again flexible from weekly to monthly payments or when the traders had sold

all of the items they purchase on credit.

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Situation inIraq

Exchange ratefluctuation

Lack of pricecontrol

Fuel /transport

difficulties

Increasednumber of

refugees/IDPs

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2.3. Basic market map

Figure 7: Basic market map / market dynamics

The market map shows the basic market chain for hygiene items in the targeted areas. The three main things of note are: 1. The disruption of goods originating from

Baghdad via Mosul. 2. Refugees and IDPs creating increased demand for

key items 3. Potential impact of fuel shortage at market and

consumer level

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3.0 Conclusions / Recommendations

Conclusions Markets in Dohuk have not been greatly affected by the conflict in other areas of Iraq. The major impact

has been on food supplies transported from Baghdad via Mosul.

The influx of IDPs and refugees have increased demand for certain items whilst from the market perspective helped mitigate the reduced purchasing power of host communities due to non payment of salaries. As a result physical markets are operating roughly at a pre-crisis level, albeit with a different customer base. Depending on how the situation evolves linked to further population movements and continued non-payment of salaries markets could be destabilised in the future.

Linked to the point above there could be an increase in the vulnerability of host communities, which needs to be monitored. As any support just to IDPs and refugees potentially has the risk of increasing tensions with host communities.

The market can sustain the demand for hygiene items whilst being able to meet increased demand for key items (for both camp and non-camp). Key hygiene items are readily available with imports from Turkey and surrounding areas.

NRCs PDM data for the hygiene kits shows the rationale to change how hygiene kits are provided and this market survey shows that a market-based approach to hygiene item provision is feasible.

Recommendations This survey has show that there is no need to directly distribute hygiene kits to beneficiaries. Markets are functioning, therefore a voucher based model would be feasible.

Specific recommendations: Explore options for cash and voucher-based approaches for essential hygiene item provision. Different

modalities include:

Cash vouchers:

Advantages Disadvantages

Allows beneficiaries freedom, whilst ensuring they meet hygiene needs.

Support to local markets.

No direct handling of cash, which can be an advantage if security is a concern.

Quality of goods can be monitored through the selection of certain supplies.

Administrative set up and management.

Voucher set up can be slow

May require training of traders and beneficiaries.

Trader “buy-in” may takes some time

Smaller traders may not benefit.

Restricts beneficiaries to specific shops / locations.

Commodity vouchers:

Advantages Disadvantages

Support to local markets.

Quality of goods can be monitored through the selection of certain supplies.

Administrative set up and management.

Voucher set up can be slow

Restricts flexibility and choice.

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Voucher may not meet all needs (similar problem to do direct distributions).

May require training of traders and beneficiaries.

Trader “buy-in” may takes some time.

Smaller traders may not benefit.

Restricts beneficiaries to specific shops / locations.

The situation will need to be monitored on a regular basis. This monitoring will have to encompass

market monitoring to ensure that prices and supply remain stable. As well as ensure whatever modality is chosen it is relevant to the needs of the targeted recipients.

With the free movement of people and goods in and out of camps, the modalities listed above are relevant in both camp and non-camp settings. There however may be different regulations to their use in each setting.

Consider supporting vulnerable host communities.

A number of elements will need to be continually monitored, most notably a change in the security situation, and also if there are recurrent fuel shortages.

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Annexes

1. Terms of Reference (ToR) Market Assessment of Hygiene Kit Materials Dohuk, Kuridstan

Background More than 160.000 Syrians have fled their country and sought refuge in the Kurdistan Region of Iraq (KR-I) Approximately 66,000 refugees have settled in camps or host communities in Dohuk governorate, where emergency WASH goods and services have been offered by government authorities, local and international NGOs and UN agencies including UNICEF. Since January 2014, the Dohuk governorate has received an additional influx of an estimated 100,000 Iraqi IDPs fleeing the conflict in Northern Iraq. While the government of Kurdistan, UN agencies, and NGOs alike are rising to this increased challenge by increasing the scale and scope of their emergency assistance to all displaced people (regardless of their place of origin), there is a growing recognition that traditional methods of delivering goods and services may not be as efficient as market based approaches. As part of the current Project Cooperation Agreement (PCA) with UNICEF, NRC proposes to transition to market based support for essential hygiene items as an alternative to direct distribution. To inform this process, NRC is planning to conduct a rapid market assessment using methodologies outlined in the Emergency Market Mapping and Analysis (EMMA) Toolkit.

Objectives

The primary objective of this market assessment is to determine if local vendors can supply essential hygiene items as an alternative to secondary or top-up distributions by agencies. A secondary objective is to determine if cash or vouchers for hygiene items are a viable alternative to top up or initial distributions within the current response context.

Dates 14-19 July, 2014

Geographical Area Markets in or around refugee and IDP settlements in Dohuk Governorate.

Outputs Six to eight (6 - 8) page report on rapid market analysis of essential hygiene items in Dohuk with recommendations for potential to use vouchers as replacement for secondary distribution.

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2. Survey location map

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3. Survey form Market/trader location:

Camp / Urban:

Name of Enumerator:

Date:

1. What is your type of shop?

Medium sized / sub-supplier Small shops

Wholesaler Medium Shops

Large shops / supermarket

2. Who are your main customers?

Mixed New arrivals Local Residents

3. Do you provide items on credit to your customers?

No Yes

If Yes, what are the terms of the credit given?

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4. What are the main type of items you stock?

Food Hygiene items (For example: Soap, sanitary items, shampoo)

Clothes Non-food items (for example: buckets)

Household items (cutlery, plates, cups etc)

Other (specify) Other (specify)

Other (specify) Other (specify)

5. Where do you get your stock?

From within Kurdistan or Iraq Within Dohuk (larger supplier, wholesaler)

Buy from small local shops within Dohuk Import directly from neighbouring country

6. Do you suppliers allow you to purchase items on credit?

No Yes

If Yes, what are the terms of credit?

7. Is the market functioning normally?

No Yes

If, No why?

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8. Has the conflict affected your business?

No Yes

If, Yes how?

9. Has the recent fuel shortage affected your business?

No Yes

If, Yes how?

10. Do you face any other challenges?

No Yes

If, Yes what?

11. Have your sales increased, decreased or stayed the same for hygiene items in the last 60 days?

Stayed the same Decreased Increased

If, Increased why?

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If, decreased why?

12. If your sales increased, have you been able to meet demand?

No Yes

If, No what constraints do you face?

13. Which items do you sell the most?

1.

2.

3.

4.

5.

14. Which hygiene items do you sell the most?

1.

2.

3.

4.

5.

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15. Have prices of hygiene items changed in the last 60 days?

Stayed roughly the same Decreased Increased

If prices have increased, why?

If prices have decreased, why?

16. Do you expect prices of hygiene items to change in the last 60 days?

Expect to stay the same Expect to decrease Expect to increase

Why do you expect prices to increase, why?

Why do you expect prices to decrease, why?

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# Item Top 3

Brands

Unit* (use local units if appropriate)

Price (Local

currency)

Where does the item

come from?

Quantity currently in

stock

Has the supply of this

item been affected by the recent

events?

Is demand for this item

low/normal/high?

How fast are you able to restock this

item?

Are there any issues in

sourcing this item?

1 Soap

2 Sanitary pads

3 Shampoo (anti-lice)

4 Detergent