Lebanon to Build Two New Grain Silos
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Following the 2020 Beirut explosion, Lebanon lacks national reserves and relies on imports for wheat. Before the conflict in Ukraine, the country imported approximately 80% of its wheat from Russia and Ukraine. Lebanon is currently struggling to find new markets that satisfy its wheat demand, given its low purchasing power amid the pandemic inflation. According to the Lebanon Crisis Analytics Team at Mercy Corps, the price of wheat flour has increased by 209% since the beginning of the Russian invasion. The annual food and beverage inflation, which rose to a staggering 332% in June, exacerbates this.
Lebanon already received a $150 million loan from the World Bank to fund immediate wheat imports to provide poor and vulnerable households and displaced populations with affordable food options. Lebanon’s Minister of Economy and Trade, Amin Salam, projects that the loan will cover food supplies for six to nine months. Salam believes that the loan will most likely last for eight months. During this timeframe, Salam seeks to receive an additional $3 billion loan from the International Monetary Fund (IMF) as part of a promised support package pending approval.
In addition to importing food, Lebanon plans to build two new grain silos, which will cost approximately $100 million. According to Salam, several countries have already expressed interest in supporting the project, including Germany, the United States, France, the United Arab Emirates, and Qatar.
The project received official approval following the technical feasibility study that the European Bank for Reconstruction and Development conducted. The plan is to construct two-grain silos north of Beirut in the Tripoli Port and the eastern Bekaa Valley. The new silos will be fully operational in around a year and hold approximately 125,000 tons of grain, equivalent to nine months of reserves.
Building the new grain silos is a significant step forward for Lebanon’s crisis management. In addition to easing the pressure of wheat imports, which are expensive and at times slow, the silos also point to the beginnings of more organized economic planning, which might well lift the country out of its economic collapse.
Lebanon National Wheat Policy
Lebanese Agriculture Minister Abbas Hajj Hassan launched a national strategy for wheat cultivation amid the concerns of a wheat crisis in the country as the Russia-Ukraine conflict continues to evolve in early November.
“We developed a plan for distributing seeds to farmers and monitoring the seasons by seeking support from Lebanese and foreign experts,” said Hajj Hassan, hoping the plan could help Lebanon achieve high-quality production and build a solid agricultural sector.
He made the remarks at the strategy’s launch ceremony attended by representatives of international organizations, including the Food and Agriculture Organization (FAO) and the World Food Program (WFP). Hajj Hassan explained that the strategy includes the distribution of 300 tons of wheat seeds to 2,200 farmers, with the Agriculture Ministry financing 50 percent of the wheat price.
For her part, Noura Ourabah Haddad, FAO Representative in Lebanon noted that FAO would soon sign an emergency agreement with the Lebanese Ministry of Agriculture to provide small farmers with more than 150 tons of wheat seeds and train them on agricultural practices.
Fears of compounding disruptions in wheat and bread supplies have been rising since the Ukraine-Russia conflict, as Lebanon imports the bulk of its grain from the Black Sea region. According to the AgFlow data, Ukraine led their import market with 0.6 million MT in 2021-2022, followed by Russia (0.2 million MT) and Bulgaria (0.1 million MT). In late September, Lebanon was officially informed of Russian President Vladimir Putin’s approval of donating 25,000 tons of wheat to the crisis-hit country.
Other sources: BORGENPROJECT
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