BEIRUT

- In front of the window of a bakery in northern Lebanon, men and women with sweaty and desperate faces crowd the waiting line, jostling toward one goal: to get one, or two, or at most three bundles of bread.

A woman, indifferent to respecting the role in the queue, which has become a familiar Lebanese scene in front of gas stations, pharmacies and bakeries, shouts with 20,000 pounds in her hand, "Very urgent, my house is far away, give me the tie and save me." Then people's voices rise to each other, "We are all in a hurry." Looking for any opponent to cure their bitter reality.

In the midst of the crowd, the Lebanese, Muhammad Bazal, denounces, saying - to Al Jazeera Net - "Does it make sense for us to scramble and quarrel for a bundle of bread?"

The elderly man regrets this situation, after wandering exhaustedly to some of the ovens, and says, "I arrived here hours ago so that I would not return to my house empty-handed, and I will buy the tie at double its official price without a supervisor."

This scene is a sample of a general situation that prevails in a number of Lebanese regions in front of bakeries due to the scarcity of Arab bread.

The Captain of the North Ovens Tariq Al-Mir told Al Jazeera Net that some large mills close their doors, and others refrain from delivering the entire flour quota to the ovens;

A quarter or half of the quantity was drained, which led to the shutdown of about 25% of the furnaces.

The roots of the crisis

Historically, Lebanon imports all its wheat needs annually at a rate of about 600 thousand tons, or about 50 thousand tons per month. 60% of these imports come from Ukraine, and about 20% from Russia and Romania.

The Lebanese government, through the Central Bank of Lebanon, supports the import of wheat 100% at the official exchange rate for the dollar (1507 pounds), after it approached the black market, which controls the actual value of the currency, about 29,000 pounds to the dollar.

However, the Central Bank is facing difficulties when opening credits to import wheat, due to the great scarcity of dollars it has, and the decrease in its mandatory reserves since the start of the crisis (summer of 2019), gradually decreasing from 17 billion to about 11 billion dollars, according to previous statements by Central Bank Governor Riad Salameh.

Since the outbreak of the war between Russia and Ukraine, Lebanon has faced an additional crisis in providing for its wheat import needs, especially after the explosion of Beirut Port on August 4, 2020, destroyed the dumps (silos), which contained about 48 large warehouses, and kept about 85% of Lebanon's wheat. And its grain and provides the country's need for about 6 months to come.

At the present time, mills and ovens are responsible for storing grains and wheat after they are unloaded, outside the direct authority of the state represented by the Ministry of Economy, which is the guardian of the sheds.

Ministry measures

In an exclusive interview with Al Jazeera Net, Lebanese Economy Minister Amin Salam explains the official view of the causes of the loaf crisis.

He says that his ministry has been working for about a week to prosecute what he describes as "black market traders" who have taken advantage of the crisis to sell subsidized flour that is dedicated exclusively to Arabic bread, in order to use it in the production of other unsubsidized items, hoping for profits, and that "the ministry's prosecutions will continue with mills and ovens to arrest the offenders."

Historically, Lebanon imports all its wheat needs annually, at a rate of about 600 thousand tons, or about 50 thousand tons per month, 60% of which are from Ukraine, and about 20% from Russia and Romania.

The minister explains that there are new quantities of wheat that have recently arrived in Lebanon, and some of them have been unloaded, and he does not deny the existence of obstacles when the Central Bank opened financial credits to import wheat, especially since Lebanon incurs an average of 25 million dollars per month to cover its expenses, noting that "this amount we were monitoring recently from The Special Drawing Rights that Lebanon obtained from the International Monetary Fund, amounting to about $1.1 billion, and not from the Central Reserve.

He talks about holding meetings to take financial measures, and to demand the Central Bank to return the value of the wheat subsidy to what it was, and Salam reminds that the quantity of imported wheat decreased to about 40 thousand tons per month, after a decision taken by the government about a month ago to limit the import subsidy of wheat to the production of Arabic bread, without support. Any other product such as French bread and its derivatives and sweets, pointing to the doubling of pressure after the rise in the price of a ton of wheat globally from about $350 to $500.

In Salam's opinion, the bread crisis is multilateral, as it is the result of 4 factors that he mentions in the following:

  • First, Lebanon's financial problem and its inability to support imports with the same value and quantity. In the last two payments, "we paid only half of the financial value of wheat imports per month, i.e. about $12 million, which led to a decrease in quantity."

  • Secondly, the destruction of the port's dumps made Lebanon without a strategic stockpile of wheat, which is a big problem that enshrined the equation "we consume all the wheat we import simultaneously."

  • Third, the phenomenon of crisis merchants struck the sector at its core, and internally flour became subject to sale on the black market or smuggled into Syria.

  • Fourth, the problem that is being overlooked, according to the minister, is that Syrian refugees in Lebanon consume about 400,000 bundles of bread per day.

    "That is, at a rate of 40% or 50% of the wheat that enters Lebanon."

The minister believes that the bread crisis will soon be resolved, with the disbursement of a $150 million World Bank loan that Lebanon received to support wheat imports.

"We seek to solve the problem of refugees' consumption of bread, through additional external support, so that it is not at the expense of the Lebanese people," he said.

The production of Arabic bread in Lebanon faces great difficulties due to the scarcity of wheat (Al-Jazeera)

Interweaving of responsibilities

In parallel, banking risk expert Mohamed Fahili believes that the political authority does not deal seriously with the “Central” regarding the file of importing wheat as well as medicines, “because it does not adhere to the aspect concerned with it in terms of paying the value of the real dollar to it.”

Therefore, the responsibility for the bread crisis lies primarily - in the opinion of the expert - on the parties to import wheat at a subsidized price, and it is an accounting relationship between the government represented by the ministries of finance and economy and the Bank of Lebanon.

The expert reminds that the state is in a state of large deficit and its revenues do not cover its expenses, and it is unable to pay its obligations to the Central Bank, "which means that all its solutions to provide import funds are partial, immediate and unsustainable."

And he said - in his speech to Al-Jazeera Net - that the problem of wheat goes beyond the issue of its support to the issue of its availability from the countries from which it is imported, and the rise in its prices globally, which exceeds the ability of collapsing Lebanon to bear it.

For her part, the journalist specializing in economic affairs, Azza Hajj Hassan, finds that the words of the Minister of Economy confirm the theory of creating a crisis, and that sufficient wheat does not mean sufficient bread production, which leads to the failure of the usual quantities of flour to reach bakeries and ovens.

She told Al-Jazeera Net that the phenomenon of the black market for bread portends great dangers, as the price of a bundle in some bakeries has reached 25,000 pounds, while officially it does not exceed 15,000 pounds with the highest weight.

The Lebanese Minister of Economy: The phenomenon of crisis traders hit the sector at its core, and the flour internally became subject to sale on the black market or smuggled into Syria.

She spoke of a new phenomenon represented by "some individuals tempting to buy bread in large quantities from separate bakeries, and to sell it in popular neighborhoods on stalls at multiple times its price."

Therefore, some bakeries, according to the journalist, "requested the identities of those who buy bread, especially Syrian refugees, and they have become legalized and allow the sale of two bundles for each individual only."

And if wheat importers refuse to deliver flour to the bakeries, according to Hajj Hassan, they place the responsibility on the Central Bank, as among the procedures for agreeing to open credits to support the import of wheat shipments and transfer money, there is a time that extends for two weeks sometimes, during which they refrain from delivering flour at a subsidized price as a kind of challenge and pressure On the government and the central.

The journalist believes that the Ministry of Economy has a great responsibility to eliminate the black market for bread, because it "knows its owners, and it is required to raid it with the support of the security forces of warehouses and to oblige importers and traders to deliver flour to the bakeries, before going to the Financial Public Prosecution and holding them accountable," noting that the Lebanese judicial path is long due to political interference. And that the wheat sector is subject to partisan and sectarian favoritism like all other sectors.

She believes that most traders want to sell various products that are used in the preparation of flour, including Arabic bread, at a high price that is not subsidized to make profits, describing it as an immoral goal against citizens after about 80% of them became poor.

Azza al-Hajj Hassan expects the bread crisis to continue or to rise from time to time, because the problems of importers with the Central Bank when opening credits still exist, "which means increasing pressures and extortion at the expense of people's right to obtain a bundle of bread at a subsidized price."