Post Date : August 5, 2020
As Beirut frays under the impact of the deadly explosion that had rocked the Port and the people, this comes as deadly blow for the country’s food supply chain as the entire country is dependent on the port for imports. Amidst acute financial crisis and food shortage, the explosion at the port is highly alarming of what lies ahead for the country. We take a look at the possible impact on the food supply chain and why it could not have come at a worse time for the country.
As casualties keep on rising by the minute, the disastrous blasts that rocked the port of Beirut after a fire ignited 2,750 tonnes of ammonium nitrate, stored unsafely in a warehouse, has sent shock waves across the world but to the people of Beirut, this only adds to their already existent woes as Lebanon has been struggling through harsh economic crisis.
The explosion destroyed the largest port and the economic lifeline of the country – which will now make it even more difficult to import food and other aid as well as silos that contain the national grain reserve.
Lebanon imports up to 80 percent of its food needs and is particularly reliant on imported soft wheat. About 85 per cent of the country’s cereals are stored in the port facility.
The incident could not have occurred at a worse time and has hit communities who were already suffering from the impact of the COVID-19 crisis.”
“Beirut’s main port, now completely damaged, is vital for much of the food, grains, and fuel that Lebanon imports, and families will immediately feel the shortage in basic needs as a result of this tragedy.”~Jad Sakr, acting Country Director of Save the Children in Lebanon
Only last week, Save the Children had reported that half a million children are hungry in Beirut as rising numbers of families lost their livelihood to the economic impact of the coronavirus lockdown.
The Port of Beirut is the main port in Lebanon located on the eastern part of the Saint George Bay on Beirut’s northern Mediterranean coast, west of the Beirut River.
Considered as a gateway to the Middle East, the Mediterranean seaport serves as a midpoint between Europe, Asia and Africa and is a major point of passage for ship fleets between East and West.
It also functions as an important gateway for transporting freight to Syria, Jordan, Iraq, and the Persian Gulf States and had been selected as a transshipment hub for two of the largest container shipping companies in the world.
Ongoing Financial and Import Crisis
The explosion at Beirut port comes as a hammering blow to Lebanon that was already reeling under import woes for the past few months as supply chains were heavily impacted by the coronavirus crisis and a financial crisis that has wiped out about half the value of the currency and sent prices skyrocketing for months.
Supply disruptions coupled with the hard currency squeeze are igniting fears of more inflation as poverty levels rise. Prices of consumer goods have nearly doubled in the past six months.
During the ongoing pandemic situation, Lebanon’s food importers, already hit by a dollar crunch, were struggling to book new cargoes as the pandemic threatened supplies and warned of more painful price hikes.
The government has earlier warned that foreign currency reserves plummeted to “dangerous” levels, pledging to keep them for key goods: wheat, fuel and medicine.
All of the grain stored in Beirut port has been destroyed and given that Lebanon imports most of its food, widespread food insecurity is expected in the coming weeks.
The country was already reeling under massive Food importers like Hani Bohsali said pressure was piling on stocks, already reduced by banking controls that force buyers to get scarce dollars on an informal market.
The destruction of the country’s largest port will now make it harder to import food and other aid as well as silos that contain the national grain reserve.
During the coronavirus pandemic, there was scarcity of fish with imports running low and also due to labour shortages in other countries.
Lebanon’s government had, for the first time in years, considered importing wheat itself, a job usually left to private mills.
“Children, even those from Lebanese middle-income families, are increasingly eating less or nothing at all for a whole day,” Mr Sakr said while talking about the food crisis just last week.
Limitations of the industrial sector
With a tiny industrial sector and scant natural resources, Lebanon’s economy produces few goods.During the lockdown imposed amidst the coronavirus pandemic, prices for most goods had risen 45-50%, with some already running out.
It was however predicted that any harsher shortages could still be a few months off as importers had put stocks of most goods at 1-2 months and supermarkets remained largely full.