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The Market System for Corrugated Galvanised Iron (CGI) Sheet in Haiti

Port au Prince
February, 2010

On January 12, 2010, an earthquake of 7.0 magnitude hit the island of Haiti, approximately 25 km west of Port au Prince. The Haitian government estimated that up to 230,000 died country-wide in the quake, and another 300,000 were injured. 180,000 to 300,000 households in Port-au-Prince (900,000 to 1.5 million persons) are estimated to have become IDPs as a result of housing destruction.

This EMMA study was conducted about four weeks after the earthquake, focusing on the market system for corrugated galvanized iron (CGI), a key material for housing reconstruction, and the earthquake-affected population in Port-au-Prince. It focused on the market system's capacity to meet the demand for CGI in greater Port au Prince and beneficiaries' preference for the type of shelter assistance they receive.

The CGI market chain is built around 4 categories of major actors, including importers, middle wholesalers, retailers and consumers. Warehouses, ports, available credit, overland transportation, and roads from Dominican Republic are the primary inputs for the CGI market system. Prior to the earthquake, Port-au-Prince's port was among the most expensive in the Caribbean to bring goods through, but for many importers was still preferable to shipping material overland from Dominican Republic. Formal credit was very expensive.

The earthquake led to decreased consumer demand because of reduced purchasing power, despite the enormous need. Similarly, the international community has made no movement on purchasing CGI in large quantities, although importers and large traders believe they will do so. The result is that the market for CGI has ground to a halt: wholesalers and importers do not know how to plan for the anticipated increase in demand, and given this uncertainty, have been reluctant to import more CGI stock without contracts in place. Regular importers have the capacity to bring in the needed volumes of CGI, but will face supply delays, high transportation costs and storage challenges. Middle-wholesalers and retailers will most probably keep a weak position on the market chain, since importers will focus on larger-scale customers. This
might result in the increase of CGI prices on local markets for household consumers. Because imports and supplies are being funneled tp big reconstruction projects, supplies to provinces will probably decrease and become insufficient, with price hikes likely.

To re-establish a flow along the supply chain ensuring income opportunities and CGI availability at all levels, a multifaceted approach that integrates the following elements is recommended: CGI vouchers to vulnerable households, redeemable at neighborhood hardware retailers; distribution of building material to very vulnerable HH who have limited mobility; cash grants for neighborhood retailers to rehabilitate shops and re-start business activities; facilitating small retailers' access to stocks; and advocating on behalf of market-based interventions to the international community.

Report authors: 
not specified
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