The war on Ukraine is another crisis burdening the Lebanese people

The effects and repercussions of the war on Ukraine were not in the Lebanese people’s calculations and the last things they needed were the repercussions of this Russian military intervention in Ukraine, increasing the suffering of the people on a daily basis, given they are already in an economic crisis.

On 24 February, Russia launched a military operation in Ukraine, which was followed by angry international reactions and the imposition of “tough” economic and financial sanctions on Moscow.

The effects of the war were felt around the world, including in Lebanon, which is already suffering from a crisis described by the World Bank as “one of the most severe global crises”, “likely to rank in to top 10, and possibly top 3 more severe crises episodes globally since the mid -nineteenth century.”

Signs of the repercussions of the war began to loom over Lebanon, threatening a food security crisis if it is prolonged.

Lebanon, Russia and Ukraine

Lebanon needs between 550,000 and 650,000 tonnes of wheat annually, according to government data.

The independent research firm, International Information, stated that imports from Ukraine amounted to $354 million as an annual average, during the years 2012-2020.

It noted in a report published at the end of February, that wheat ranks first among the commodities imported by Lebanon from Ukraine, with a volume of 511,000 tonnes.

In addition to wheat, Lebanon imports sugar, cattle, sheep, iron and barley from Ukraine, according to the study.

READ: Lebanon holds talks with Turkey, India over wheat supply crisis

According to Lebanese customs figures, Russia is one of Lebanon’s largest sources for importing seed oil, in addition to petroleum oils, coal, and other commodities.

Lebanon cannot store huge quantities of wheat because Beirut Port used to house the largest silos in the country, but after the explosion on 4 August 2020 it was completely destroyed and lost its stock – about 85 per cent of Lebanon’s grain and wheat.

No new silos have been secured nor have the silos been reconstructed. Wheat is stored either in the 12 Lebanese mills, enough to store a month’s consumption or slightly more, or the state buys wheat and stores it after paying its price to the countries from which it buys it.

Wheat stock

Last week, Economy Minister Amin Salam said Lebanon’s stockpile of wheat is sufficient for about 45 days, and that the government has made deals to purchase additional quantities, calling on its citizens not to panic buy.

He pointed out that the Council of Ministers agreed to grant the General Directorate of Cereals and Sugar beets in the Ministry of Economy approval to import 50,000 tonnes of wheat, to secure a reserve for an additional month.

He added that with the approach of the blessed month of Ramadan, when food consumption will rise, we have heard about fears of a shortage of some foodstuffs, such as oils and sugar.

The Lebanese minister revealed that an agreement had been made with importers, owners of commercial centres, mills, ovens and livestock and poultry dealers, to “provide us with the quantities they have, and we will continue to cooperate with them so that there is no disruption in the markets.”

On the other hand, the head of the Syndicate of Food Importers, Hani Bohsali, told Anadolu Agency: “We are in the midst of a crisis, but we have not reached a disaster.”

“The crisis that exists today is focused on finding alternatives for goods to be shipped quickly, because the supply stopped suddenly due to the war.”

“At the present time, we have stocks of wheat and oil that are enough for over a month and a half, so finding alternative solutions is possible within this period.”

Bohsali said the US, Canada, Australia, Romania and Bulgaria could be alternative wheat sources. “We used to buy wheat from Ukraine because it was the most economical,” he said.

He did not hide that “the prices of food commodities will rise in Lebanon”, meaning that citizens will suffer additional burdens on them, amid a significant decrease in their purchasing power with the collapse of the lira.

Pre-emptive steps

Earlier this month, the government formed a ministerial committee to follow up on the issue of food security, to anticipate every problem that might result from the repercussions of the Russian-Ukrainian crisis.

Security services also raided shops to combat any monopoly on food commodities or efforts to raise prices.

Lebanon also passed a law to limit the use of flour to bread making only, with the aim of preserving wheat for a longer time.

Fuel sector

Over the weekend, fuel stations in Lebanon witnessed long queues for fear of a significant increase in the price of gasoline as globally costs increase.

After lifting fuel subsidies last summer, the Ministry of Energy issues a table of fuel prices twice a week, recording a decrease or a rise, according to two factors, the first is the exchange rate of the lira against the dollar, and the second is the global price of a barrel of oil.

Today, the price of a barrel of oil exceeds $110, and earlier this week it reached $138.

Minister of Energy and Water Walid Fayyad confirmed “gas is available in the local markets, and we are not in a crisis.”

In turn, President of the Association of Petroleum Importing Companies, Maroun Chammas, said: “The challenge before us today is to continue to secure the local markets with fuel without interruption.”

He added, “Lebanon imports large quantities of Russian oil, and today we are looking for alternative markets, such as the Gulf states or Turkey.”

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