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Banque du Liban has ceased paying sugar subsidies: Economy Ministry

Banque du Liban has ceased paying sugar subsidies: Economy Ministry

The Economy Ministry raised the price of bread yesterday. (Credit: Anwar Amro/AFP)

BEIRUT — Lebanon’s central bank has failed to pay for sugar subsidies, an Economy Ministry spokesperson told L’Orient Today, claiming that this is contributing to increases in the price of bread.

The ministry has raised the per-gram price of bread seven times so far this year. The latest hike comes as the future of subsidies for basic goods grows increasingly uncertain amid a crippling economic crisis.

At a 20.7 percent per-gram price increase, bakeries will now sell 910-gram bundles for LL3,000, the Economy Ministry, which sets the price of bread, said in a statement yesterday. A 395-gram bundle will now cost LL2,000, a 16.88 percent increase, the statement added.

One of the main factors leading to the latest price increase is that the central bank has stopped paying for sugar subsidies — an ingredient used in bread-making — which has put pressure on bread production costs, the Economy Ministry spokesperson said.

While stressing that sugar subsidies have not been officially lifted, the spokesperson made it clear that Banque du Liban has simply stopped paying for the ingredient, which is causing bakery owners and importers to purchase sugar at the parallel market exchange rate, which is now more than LL15,000 per greenback.

“They [the central bank] didn’t officially lift the subsidies on sugar, they just did not pay,” the spokesperson said, without confirming for how long sugar subsidies have gone unpaid.

The spokesperson also explained that a number of other factors determine the cost of bread, including the international price of wheat, but that this time around, the price of sugar was an added factor.

Antoine Seif, CEO of Moulin D’Or bakery, told L’Orient Today that based on numbers from the Economy Ministry, “every ton of flour [used in bread-making] requires 35 kilograms of sugar.” However, he added that total quantities vary from bakery to bakery.

Since the onset of the financial crisis in mid-219, BDL’s dwindling dollar reserves have been used to subsidize basic imports, including wheat, medicine and fuel, at the Lebanese lira’s official peg of LL1507.5 to the dollar. Without these subsidies, importers would have to buy dollars from the market to pay foreign suppliers, meaning that basic ingredients like wheat and sugar would become 10 times more expensive.

When asked about the nonpayment of sugar subsidies, a BDL spokesperson declined to comment.

Lebanon is grappling with the worst economic crisis it has endured in decades, with its national currency losing at least 90 percent of its value, rendering many non-subsidized household items unaffordable to Lebanese without access to dollars.

BEIRUT — Lebanon’s central bank has failed to pay for sugar subsidies, an Economy Ministry spokesperson told L’Orient Today, claiming that this is contributing to increases in the price of bread.The ministry has raised the per-gram price of bread seven times so far this year. The latest hike comes as the future of subsidies for basic goods grows increasingly uncertain amid a crippling...