Lebanon’s bread crisis: the ingredients of a shortage that may in fact be nonexistent

Lebanon’s bread crisis: the ingredients of a shortage that may in fact be nonexistent

"Feed me," says this child drawn on a wall in Beirut. (Credit: L'Orient-Le Jour)

The Federation of Bakeries Syndicates in Lebanon warned yesterday the Economy Ministry for the last time that if it does not issue the flour delivery permits by July 16, it shall “assume the responsibility of supplying the population with bread.”

Mix greed and avarice. Add a collective distrust and lack of governance to the mixture. Then, add a large ladle of laissez-faire. Simmer it all until an anarchic mixture is obtained. Add a sprinkle of misery and incompetence. Let it sit in a collapsing economy. It doesn’t matter here if you’d like to serve it hot, cold or warm.

If Lebanon runs out of bread, it will be once again affirming that all necessary ingredients for this crisis are available.

Last summer, long queues formed in front of gas stations in the context of a fuel shortage. New summer, new shortage: this year, it is in front of Lebanon’s bakeries, with some regional disparity, that the people are queuing.

Almost the same pattern is being repeated, which the Lebanese would have preferred to avoid, particularly since they have been mired in endless economic and financial stagnation for almost three years.

However, “there is no shortage of bread,” Amin Salam stressed to L’Orient-Le Jour three weeks ago. The caretaker economy minister is running out of patience. “For a change,” he said, “my ministry and the government have done an exemplary job in this dossier.”

In mid-June, Salam accused the private sector of “theft,” before he apologized to them, while adding that “thugs make up half of the sector.”

The minister, who had denied any flour smuggling via the Syrian border, based on the Lebanese Army’s claims, said a week later that bread smuggling to Syria is happening “on massive scale,” citing a new report by the army.

In any case, Salam denounced a “sabotage” against the work that his ministry has been doing to ensure food security in Lebanon.

It is a complicated issue that has become difficult with the start of Russo-Ukrainian war and the halt of wheat exports by these two countries, the largest suppliers of this essential commodity to Lebanon.

While the minister has so far been very talkative on the subject, this does not apply to the bakery sector’s professionals, who did not answer, or barely responded to L’Orient-Le Jour’s enquiries.

But they finally decided to express themselves yesterday, during a press conference the Federation of Bakeries Syndicates held in Khaldeh (south of Beirut).

On Monday, they accused the Economy Ministry, and its General Directorate of Cereals and Sugar Beets, of not fulfilling their responsibilities, “by not securing quantities of subsidized flour intended for Arabic bread.”

A statement that may ultimately feed internal feud a bit and intensify the exchange of accusation of “who is at fault.”

This is while the waistlines of more than 80 percent of the population, which has plunged below the poverty line since the onset of the crisis, are hollowed out.

In search of lost bread

On the ground at least, “there is no more Lebanese bread,” a bakery manager in a Beirut supermarket repeatedly told his customers last week.

To prevent him from shouting his head off more than necessary, customers who were turned back warned those who were arriving by raising their eyebrows.

Everybody knows it, nobody believes it. The rabta (Arabic for bundle), a key component of the Lebanese diet, is not found on the shelves every other day.

On the other hand, there is an abundance of croissants, petits-fours, thyme cakes and other baguettes and pastries in stores and bakeries.

It is a proof that “the sector’s actors are using subsidized flour to make products other than Arab bread,” said Salam recently, before accusing them of making “a profit margin exceeding 600 percent.”

The wheat subsidy policy is designed to allow the sector to import wheat thanks to BDL financing wheat imports at a ratio of 100 percent since spring 2021, in foreign currency calculated at the official rate (LL1,507.5 per US dollar) rather than the parallel market (around LL29,000 yesterday).

The latter is a free market where one can find everything, on the sidelines of the crisis, including flour and Arabic bread which are sold at a price two times that set by the ministry.

While the shortage of Arabic bread seems to have affected the whole country in recent weeks, it hit the country’s rural areas harder, due to lack of monitoring capacity by authorities.

While the situation seems to have returned to normal in the bakeries in Saida (South Lebanon), according to our correspondent, it is far from being under control in North Lebanon and the Bekaa Valley.

“Many bakeries open in the early morning hours to secure one or two bundles of subsidized bread per person, but have to close before noon,” said our correspondent in the North. A dense crowd surrounds them “during opening hours.”

The same applied to Zahle, in the Bekaa Valley during the past weekend, where our correspondent said “about 30 people” are waiting in the evening for their turn in front of Chamsine bakery, while “the small grocery stores had closed when the morning came to a close.”

Of course, not everyone receives their bread bundles at a good price. In addition to the fact that it is sold on the black market, rumors that “large quantities of subsidized flour and bread are being smuggled to Syria” are circulating in the region, our North Lebanon correspondent reported. A practice that is far from being new, he recalled.

In the capital, the situation has also improved recently. “For the moment, the quantities we are receiving are good,” said Zakaria Itani, co-manager of Shoppers, a Beirut-based supermarket chain.

“We are receiving between 100 to 150 bread bundles per day,” but “we are still implementing our rationing policy.”

In other words, customers are allowed to buy “one bread bundle per day or per purchase, because we want to make sure that everyone is served.”

This rule had sometimes created problems with “new customers who are not used to our system and are denied the purchase of four or five bundles at a time,” he said.

At Shopper’s, the shortage had peaked nearly ten days ago when “we didn’t receive any Arabic bread for two days and had to refer our customers to the bakeries.” The supermarket’s shelves were empty, although the manager said he collaborates with “four different suppliers” to ensure deliveries in times of crisis.

The problem lies in the suppliers’ tariffs, added Itani, “some sell at a price higher than that set by the ministry.”

Bread and games

According to the latest price list published by the ministry in late May, the small 365-gram bread bundle costs LL7,000, the medium 875-gram bundle costs LL12,000 and the large 1,055-gram bundle costs LL14,000.

Itani receives bread deliveries at different prices and weights. “The price of a small bundle, which is around 450 grams, ranges from LL9,000 to LL11,000, while the large one is around 850 grams and its price varies between LL14,000 and LL17,000.”

Although he understands that production costs have increased, driven by higher fuel costs, he denounced some of the suppliers’ habits.

“Various suppliers set different prices, although there is a price list that is appraised by the ministry” which is inevitably affecting the customer, “while essential goods in stores have a price limit set by the ministry as well.”

While some of the sector’s players are manipulating the prices, the Economy Ministry recently assured that the bread bundle’s price shall not hike in the near future, because “the country can no longer bear it,” given the serious crisis it is going through.

These remarks were made amid fears within the sector that BDL will lift wheat subsidies after the World Bank loan agreement ($150 million over nine months) to secure Lebanon’s wheat imports and ensure food security for the poorest populations becomes effective.

Yet, BDL assured that ending subsidies has not been programmed yet. It will be done “gradually,” said the minister. If fears within the sector are legitimate, the fact remains that this loan will only be enforced once it obtains the MPs’s final approval.

Their vote is still pending, as they can only meet for the moment in an extraordinary session convened by the president in agreement with the prime minister.

Speaking to L’Orient-Le Jour, the World Bank reiterated the remarks it made to L’Orient Today a few weeks ago: It has nothing to do with subsidy policy. As for the implementation of its loan agreement, it also confirmed that it is ready, but is waiting for Parliament’s vote.

On the syndicates’ sides, the expectation is quite different: they are waiting for the ministry to issue permits to deliver flour.

As he had said on Monday, Ali Ibrahim, the federation’s vice president, kept his word, and took stock of the shortage yesterday at the press conference by calling out to this ministry.

In his discourse, he called on the ministry to issue permits to deliver the necessary quantities of wheat to the Lebanese mills, starting with “the main ones [Bakalian Flour Mills, Crown Flour Mills] which had to close their doors in early June” due to a lack of raw material.

This is one of the reasons behind the bread shortage, he said. A situation that has encouraged the black market, according to him.

Flour shortage is estimated at a total of “4,190 tons, including 414 in South Lebanon, 2,093 in Mount Lebanon and Beirut and its suburbs, 950 in the Bekaa, 554 in North Lebanon and 180 in the mountainous regions,” he said.

However, the ministry had recently told L’Orient-Le Jour that there are a little more than 45,000 tons of subsidized wheat in the country. “Only 36,000 tons per month are needed for Arabic bread,” Salam said at the time.

It would be a matter of administrative paperwork, according to Ibrahim, who also set July 16 as the deadline for the ministry to issue these delivery permits.

“If the ministry does not respond to our call, let it assume the responsibility of supplying the population with bread,” he added.

Under these circumstances, the situation of the Lebanese is unlikely to improve, unless they make do with pastries or imported bread, if they can afford it.

The presence of Arabic bread on the shelves in shops and bakeries’ stalls currently depends on factors that no one, from the country’s authorities, to the industry’s managers and neighborhood’s shopkeeper, seems to have under control.

Traditional smuggling, black market opportunities, customer-driven pricing, and wild accusations... The ingredients of this recipe for crisis are all available so as to create a bread shortage that does not exist, or at least may not exist.

In late March, Salam had indicated in one of our articles that he was getting ready to overcome the food security challenge [looming] in the next “four to six months,” when the repercussions of the Russo-Ukrainian conflict on international markets will be felt. Lebanon barely lasted three months.

This article was originally published in French on L'Orient-Le Jour. Translation by Joelle El Khoury. 

The Federation of Bakeries Syndicates in Lebanon warned yesterday the Economy Ministry for the last time that if it does not issue the flour delivery permits by July 16, it shall “assume the responsibility of supplying the population with bread.”Mix greed and avarice. Add a collective distrust and lack of governance to the mixture. Then, add a large ladle of laissez-faire. Simmer it all until...