Lebanon imports 80 percent of its food supplies and the Port of Beirut was a vital lifeline for the country’s grain imports, storing 85 percent of its cereals.
A devastating explosion in port warehouses near central Beirut yesterday, has added another layer of misery upon a country reeling from severe economic distress and the Covid-19 crisis.
At least 100 people have been killed and 4,000 wounded in the aftermath of the blast that has reportedly caused damage to half of the city.
Significant damage was dealt to its largest grain elevator and a number of national wheat silos situated in the port, which is likely to impact the country’s already precarious food security.
Lebanon imports up to 80 percent of its food needs and has been suffering from bread shortages.
This is devastating. Lebanon was already spiralling, in the midst of a political and currency crisis with accelerating COVID-19 cases. People were going hungry - and that's the city's largest grain elevator right there. pic.twitter.com/HiGPBhLGVh— Tobias Schneider (@tobiaschneider) August 4, 2020
The Port of Beirut is Lebanon’s main sea port, and one of the busiest harbours in the Eastern Mediterranean. It consists of a general cargo terminal, a container terminal, a passenger terminal, a free zone and a silo area.
The total capacity of silos at the port are 120,000 metric tonnes (mt). The silos consist of 48 big cells, with a capacity of 2,500 mt/cell, and 50 small cells that hold 500 mt each.
“75 percent of the country’s grain imports come through the port and 60 percent of all its cargo overall,” Elena Neroba, a market analyst at Maxigrain, told TRT World.
The silos contain essential grain reserves including wheat, corn and barley, and serve as strategic storage for about 85 percent of the country’s cereals, while the other 15 percent are received directly by private firms.
Neroba states that the total grain demand for 2020 has been about 2 million mt: 1.2 million mt for wheat, 700,000 mt for corn and less than 200,000 mt for barley.
Domestic wheat production covers only 10 percent of consumption and Lebanon relies on private mills for its wheat imports, sourced mainly from European countries.
According to Neroba, half of those volumes are supplied by Russia, and 30 percent comes from Ukraine. Last year, Ukraine was the country’s top wheat supplier.
“Lebanon’s demand of wheat for domestic consumption is up to 40,000 mt per month,” she said, adding that given the country’s dire financial straits and currency exchange problems, it will be difficult to meet that demand.
The country’s dependence on a single unloading port for its wheat trade has long posed a significant supply risk. In the event of any disruption there, severe bottlenecks and acute shortages have always been bound to occur.
In the 1990s PM Rafic Hariri pursued a free trade economic policy that gutted Lebanon’s domestic industrial sector, forcing the country to rely on imports and bringing it to the current economic crisis.— Stanisław Szukalski Stan 🗿 (@Hezbolsonaro) August 4, 2020
Now Beirut’s port, responsible for 91% of Lebanon’s imports, is destroyed. pic.twitter.com/J1mYLNbnfx
While the extent of the damage to the silo’s grain reserves remains unclear at the moment, it is unlikely that the wheat stored in the silos are fit for consumption.
Wheat importers are expected to meet Minister of Economy, Raoul Nehme, today to discuss the situation.
With the port of Beirut out of operation, maritime traffic will now be diverted to Lebanon’s second largest port in Tripoli, said the Minister of Public Works, Michel Najjar.
Lebanon has enough wheat stockpiled to last 45 days - the silos at Beirut port were mostly empty at the time of the explosion, said Ahmed Hatteet, head of the wheat importers union.
Hatteet mentioned that four ships carrying 28,000 mt of wheat were unable to offload their cargo at Beirut port.
Neroba cited that two Ukrainian and two Russian vessels were meant to discharge yesterday, and there is no confirmation of what their status is presently.
In late May, Lebanese premier Hassan Diab wrote that the threat of a real food crisis was looming.
Flatbread is a staple food for the majority of the population, and the government recently raised subsidised bread prices as its currency continued to tumble.