With coronavirus threatening global wheat supply chains, the Lebanese government is looking further afield for wheat, a key import.
Lebanon is reliant on imports for around 80 percent of its food needs – of these, wheat is by far the most important, required to make widely-consumed Arabic flatbread. The vast majority of wheat imports to Lebanon come from Russia (46 percent) and Ukraine (30 percent). But typical exporters, seeking to secure supply for local populations, have begun hoarding their own reserves.
One potential new source that Lebanon could turn to is India. Last week, the Lebanese government requested 40,000 tonnes of wheat from the South Asian country, according to a Tweet from India’s Agriculture Minister.
“Based on the specific demands received from other countries, [India’s cooperative of farmers] has been asked to export 50,000 metric tonnes of wheat to Afghanistan and 40,000 metric tonnes of wheat to Lebanon,” Narendra Singh Tomar tweeted.
Al Arabiya English was unable to reach Singh Tomar for further details about the alleged request.
But a handful of large grain-exporting countries have begun hoarding their produce to ensure sufficient supplies for their own populations.
On Wednesday, Ukraine signaled that it may ban wheat exports entirely, following a call from Ukrainian bakers and millers to limit grain exports to maintain low bread prices.
Neighboring Romania recently banned cereal exports to destinations outside of Europe, while Russia pledged to limit grain exports to 7 million tonnes between April and June this year, citing fears of domestic food security in light of the current COVID-19 pandemic.
If supply chains continue to falter, India would be an ideal back up; it expects to produce over 100 million tonnes of wheat this year, far outstripping the country’s demands.
India’s announcement came days after Lebanon’s Economy Minister Raoul Nehme announced that the Lebanese cabinet had authorized importing 80,000 tonnes of wheat to fortify existing stockpiles.
When asked whether some of the wheat would come from India, Nehme told Al Arabiya English that it was “too early” to confirm source countries, and that “no decision has been made.” Cabinet is first legally obliged to announce a tender seeking offers from potential suppliers.
Lebanese millers are already concerned by the growing questions marks over the global wheat supply chain.
“After Romania banned exporting cereals, we are afraid that Ukraine will do the same. In addition, the COVID-19 crisis has increased the demand for wheat worldwide has increased, making the price higher,” Bashar Boubess, CEO of Modern Mills of Lebanon, told Arabiya English.
Boubess, whose wheat comes largely from Ukraine, cited another cause for concern for global supply chains.
“With [coronavirus], logistics are becoming very difficult,” Boubess said. “Wheat is in field or silo but not on the port side. First they have to get wheat to the port, and load it to a ship. Due to coronavirus there are not many drivers – like in Lebanon, you don’t see many cars or vans on the road.”
There are many alternative sources of wheat, Boubess explained, but not all are as economical for importers. Russia and Ukraine are traditional source countries because of their proximity to the Black Sea, which reduces freight costs.
“Russia could be an [import] country, or Bulgaria. But wheat from the United States is expensive, and logistics are difficult,” said Boubess, explaining that US wheat must be ordered in quantities far larger than from countries neighboring the Black Sea.
Boubess, who has worked in the wheat business for over two decades, has never had any experience with Indian wheat.
Arslan Sinno, President of the Dora Flour Mills, located near Beirut, is sceptical about the government’s ability to secure a source of suitable quality wheat in the near future.
“I doubt the government will find someone to sell,” Sinno said. I heard about India, but we will have to wait and see. As usual, there is no opacity. They are not asking [the millers’] advice.”
He added that Indian wheat is “typically not good quality.”