Lebanon import woes deepen as supply chains buckle under coronavirus

With a tiny industrial sector and scant natural resources, Lebanon’s economy produces few goods.
Wednesday 08/04/2020
Hani Bohsali, general manager of Bohsali Foods and Head of a syndicate of importers of foodstuffs, consumer products, and drinks, gestures as he talks at Bohsali food warehouse in Bchamoun, Lebanon, April 7. (Reuters)
Hani Bohsali, general manager of Bohsali Foods and Head of a syndicate of importers of foodstuffs, consumer products, and drinks, gestures as he talks at Bohsali food warehouse in Bchamoun, Lebanon, April 7. (Reuters)

BEIRUT--With the COVID-19 infections rising globally, slowing global food supply chains, so are fears of food insecurity in Lebanon which relies heavily on food imports.

Already hit by a financial crisis that has wiped out about half the value of the Lebanese pound and sent prices skyrocketing for months, food importers are struggling to book new cargoes. Vendors are reportedly delaying shipments and refusing new orders to Lebanon due to the coronavirus pandemic.

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

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 low. Before that, a cooking oil shipment from Ukraine and lentils from Australia were each postponed bya month because of labour shortages.

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

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 authorised 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 such as grains worry that other countries will hold back shipments as the pandemic drags on or choose not to prioritise the small nation of around six million, including some 2 million Palestinian and Syrian refugees.

“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."

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.

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.”

(Reuters)