Bakeries in Lebanon prohibited from buying subsidised flour for anything but Arabic bread
Lebanese bakeries have been prohibited from using state-subsidised flour to bake anything except flatbread.
The Ministry of Industry said on Friday that only bakeries that produced the flatbread, known as “pitta” or “Arabic bread”, a staple in most Lebanese households, would be allowed to buy subsidised flour.
The order, first reported by Lebanon’s National News Agency, is believed to be an effort to keep the staple bread’s prices as low as possible during a severe economic crisis and chronic shortages.
As Lebanon’s economy has collapsed, the value of its national currency has plummeted, inflation has soared and nearly 80 per cent of its population is now impoverished.
Medicine, oil, electricity and flour are all in short supply.
“They want to conserve as much flour as possible to save the bread, to make sure it will stay,” said Ali Ibrahim, leader of the Syndicate of Bread Owners.
Maintaining subsidies for flour used to make flatbread while flour for products such as pastries and baguettes is sold at the market rate indicates the looming possibility that bread shortages will worsen as the summer approaches.
“All mills in Lebanon have to stop delivering subsidised flour to the factories mentioned, or make them pay for the difference in price to the central bank,” the ministry said.
The central bank has continued to subsidise wheat imports, despite the Lebanese pound losing more than 90 per cent of its value in two years.
But that has not kept bread prices down, because inflation is soaring and bakeries have to pay for the cost of other ingredients and equipment in dollars or at the black-market rate. When the Lebanese currency began to unravel from the dollar in 2019, the prices of most goods and services rose out of necessity, with importers paying in dollars.
Although flatbread is cheaper than most goods, its cost has periodically risen over the past three years. Updated prices published by the Ministry of Economy this week show that a family-sized package costs 16,000 pounds (about $0.50).
Before the economic crisis, the same amount of bread cost 1,500 pounds.
Last week, the state news agency reported that flour shortages in the southern city of Nabatieh had caused long queues at bakeries and that flatbread was sold for 30,000 pounds on the black market.
The global wheat supply shortage caused by Russia’s invasion of Ukraine has also affected bread prices.
Most of Lebanon’s wheat imports come from the Black Sea region and the war has forced it to look farther afield, at an increased cost.
This month, the World Bank approved a $150 million soft loan for wheat imports in an attempt to stabilise bread at subsidised
Flour shortages in Nabatieh led to queues at bakeries, while the price of bread doubled on the black market
prices. Lebanon’s Minister of Economy and Trade Amin Salam told The National that the loan came at a time when the country “cannot take any instability in wheat” inflow.
Mr Ibrahim agreed that stabilising Lebanon’s bread prices was a national priority.
“We are trying to protect the price of Arabic bread for the sake of the people,” he said.