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38 DRC / DANISH REFUGEE COUNCILincrease in demand from other buyers, traders and wholesalers therefore face littleproblems in supplying food items to meet the local market’s demand.- Winter: In the winter, however, Afghan traders and wholesalers face additionalproblems due to: 1) an off-season for essential food items (wheat, wheat flour, rice,sugar, tea) in Pakistan; 2) lack of sizeable storage houses which would allow them tostore food items and meet demand when faced with shortages in winter; 3) heavysnowfalls in and around Kabul, causing blockage of transit roads: Salang passes tothe North and Mahipar to the East. Harsh weather also impedes internal supply offirewood from the South of the country (Jaji, Mangal, Gardiz, Paktia & Khost), andimportations of petroleum (petrol, diesel, gas) from Central Asian countries, Russiaand Iran.Potential risks of inflation? Concern about inflation is based on the potential generation of aconsiderable increase in demand of food and fuel – especially during the winter in time ofpossible shortage - if the amount of cash assistance is substantial and reaches a high numberof beneficiaries. However, the size of the market in Kabul, with a population of 6 millioninhabitants, mitigates this fear, as the current population of KIS inhabitants is comparativelysmall, with an estimation of approximately 35 000 people over 55 sites. Moreover, DRC’sprogramme is aimed at eleven of these camps. It is therefore unlikely cash assistance as suchwill put pressure on market demand for these items and will have minimum adverse impacton prices. Based on our assessment of market conditions in the KIS, access to markets doesnot appear as the main issue, hence inflationary risks due to injection of cash appearminimal in the KIS. Notwithstanding external shocks – international tensions, increase ofexchange rates, adverse effects of climatic catastrophes, there is little evidence of theinflationary impact of cash assistance as such on local markets. Two caveats, however,should be taken into account while designing a cash-based programme:- Variable supply and needs, tailored assistance: Though traders and wholesalers inKabul have the financial capacity to meet the local demand, they cannot guaranteeprovision of these items to the local market consumers at regular pricesthroughout the year. Difficulty in supply and risks of inflation in the winter, however,put in question the effectiveness of cash grants as an alternative to in-kind duringthis season. Considering needs and demands are high, complementary in-kindassistance in form of fuel and food seems adequate – even crucial – during the coldseason.- Seasonal supply and prices, tailored assistance: One of the trends in the surveyconducted for this research was the importance of seasonality for KIS inhabitants.The assessment of market conditions conducted by our research team highlightsseasonality remains a structural factor for supply and impact on prices. Givenseasonality was also noticed as essential in the variation of livelihood opportunitiesof KIS residents, as well as higher levels of vulnerability in the cold season, ourobservations call for specific implementation modalities during the winter.