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April 9, 2020 10:00 am

Lebanon’s Import Woes Deepen as Supply Chains Buckle Under Coronavirus

avatar by Reuters and Algemeiner Staff

A customer wearing a protective face mask shops at a supermarket during a countrywide lockdown to prevent the spread of the coronavirus disease (COVID-19), in Zalka, Lebanon, April 7, 2020. Photo: Reuters / Mohamed Azakir.

Lebanon’s food importers, already hit by a dollar crunch, have struggled to book new cargoes as the coronavirus pandemic threatens supplies and sparks fears of even more painful price hikes.

Some vendors are delaying shipments and refusing new orders to Lebanon — which relies heavily on imports — as the spread of the virus slows global food supply chains.

This comes at a grim time for Lebanon. A financial crisis has wiped out about half the value of the currency and sent prices skyrocketing for months.

Supply disruptions, twinned with the hard currency squeeze, risk fueling more inflation as poverty levels rise. Prices of consumer goods have nearly doubled in the past six months.

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Food importers like Hani Bohsali said pressure was piling on stocks, already reduced by banking controls that force buyers to get scarce dollars on an informal market.

Last week, Bohsali was told Moroccan sardines were no longer available after fishermen stopped going out — and even if they did, tins from Spain were running thin. Before that, a cooking oil shipment from Ukraine and lentils from Australia were each postponed a month because of labour shortages.

“Everything is slowing down and I fear that globally, the worst is yet to come,” he said.

Food security

As major state buyers from Saudi Arabia to Egypt look to beef up their strategic stocks, for the first time in years Lebanon’s government is thinking of importing wheat itself, a job usually left to private mills.

Economy Minister Raoul Nehme told Reuters the cabinet had authorized importing 80,000 tonnes though this was not “in the works today.”

“It is just a measure to be ready at any point in case we need it, for food security…to have an additional security stock.”

The government has warned that foreign currency reserves plummeted to “dangerous” levels, pledging to keep them for key goods: wheat, fuel and medicine.

Buyers of staples like grains worry other countries will hold back shipments as the pandemic drags on or choose not to prioritise the small nation of around six million.

“The interruptions because of the lack of cash dollars, the lockdowns abroad, we’re going to see the impact in two months,” said Nabil Fahed, an importer who heads the supermarket syndicate. “The supplies will not be there…I’m really worried about this.”

‘Nobody selling’

With a tiny industrial sector and scant natural resources, Lebanon’s economy produces few goods.

Fahed, who owns a major supermarket chain, said prices for most goods have risen 45-50%, with some already running out.

Any harsher shortages could still be a few months off. Importers put stocks of most goods at 1-2 months and supermarkets remain largely full despite some panic shopping during Lebanon’s shutdown.

“I work on wheat, flour, rice and sugar, and nobody is selling anything,” said Paul Mansour, owner of Crown Mills. “Whatever is already booked, there’s a delay. For any new business, there’s nothing in the market.”

“This will drag on and get very bad,” he said. “If goods are delayed beyond a month, there’s going to be a serious issue of stocks.”

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