Lebanon is the country worst hit by food-inflation crisis

World Bank says lower and middle-income countries are most affected because of soaring food prices caused by the Ukraine conflict

People queue outside a closed bakery, waiting for it to open, in Chiyah, Lebanon. Reuters

Another queue at a bakery in Khaldeh. The Lebanese Parliament has approved a $150m World Bank loan for wheat imports to address shortages in the country. Reuters

The loan will finance wheat imports for at least six months, alleviating acute bread shortages. Reuters

Lebanon has suffered from chronic scarcity of wheat and flour since its economic crisis began in 2019. Reuters

A man holds stacks of bread as he makes his way through a crowd of people queuing for bread outside a bakery in Beirut. Reuters

Subsidised Arabic bread consumed in most Lebanese households has become scarce. AFP

About 22 per cent of Lebanese households are food insecure, according to the World Food Programme, with that number likely to rise. AFP

Soaring inflation, paired with a plunge in the value of the local currency, has badly affected the purchasing power of Lebanon's citizens. AFP

Long early-morning queues often form in front of bakeries and shops as customers race to purchase limited quantities of subsidised bread. AFP

The limited availability of bread has caused tensions to frequently boil over in queues. Two people were wounded in Tripoli in mid-July after a gunfight over who was ahead in a bread queue. AP

A woman uses a sickle to harvest wheat at a field in Houla village, near the border with Israel, southern Lebanon. Reuters

Russia’s invasion of Ukraine in February has also been detrimental, with the war there hindering the country’s ability to export wheat. About 80 per cent of Lebanon’s wheat came from Ukraine prior to the invasion. Reuters

The Beirut port explosion in August 2020 destroyed the country’s grain silos and with it most of Lebanon’s wheat reserves. Reuters

Lebanon is the country worst hit by the food inflation crisis, as the country grapples with slow economic growth and soaring global commodity prices, which have been driven up by the war in Ukraine, the World Bank said in its latest report on global food insecurity.

Nominal food inflation in Lebanon hit 332 per cent, while real food inflation — which refers to food inflation minus overall inflation — rose to 122 per cent, according to the latest monthly data, the World Bank said.

Lebanon was followed by Zimbabwe, where nominal food inflation reached 255 per cent, Venezuela (155 per cent), Turkey (94 per cent) and Iran (86 per cent).

The figures are based on data from the latest month between March to June 2022 for which the food component of the Consumer Price Index (CPI) and overall CPI data are available, the Washington-based lender said.

Overall, up to 93.8 per cent of low-income countries, 89.1 per cent of lower-middle-income countries, and 89 per cent of upper-middle-income countries reported inflation levels above 5 per cent, with many experiencing double-digit inflation.

The most affected countries are in Africa, North America, Latin America, South Asia, Europe and Central Asia, the report said.

“The Middle East and North Africa relies heavily on the Black Sea region for its wheat consumption. As wheat is one of the key staple foods in the Mena, the disruption in the wheat supply chain is causing critical issues in food security in the region,” the lender said.

The food CPI has increased significantly in most countries in the region including Lebanon (216 per cent), Egypt (24.2 per cent), Morocco (9.5 per cent), Iraq (7.6 per cent), Syria (71 per cent), Yemen (43 per cent), and Palestine (8.1 per cent as of May).

Before the Russia-Ukraine conflict, which began in late February, the two countries collectively supplied about 30 per cent of the world's traded wheat and 15 per cent of corn exports.

“The inability of Ukraine to export grain from its Black Sea ports has severely reduced the supply of food to import-dependent African and Middle Eastern countries. Before the war … Ukraine was a breadbasket — providing wheat, maize, and barley to countries throughout Asia, Africa and the Middle East,” the lender said.

Net food and energy imports in the Middle East countries including Egypt, Jordan, Lebanon, Morocco and Tunisia account for between 4 per cent and 17 per cent of their gross domestic product, according to a recent S&P Global Ratings report.

While Egypt secured wheat for six months after its import agreement with India for 180,000 tonnes, “most other countries in the region are still facing a critical wheat shortage”, the World Bank said.

Lebanon, which is facing its worst economic crisis since independence in 1943, recorded the 24th consecutive triple-digit inflation increase in the Central Administration of Statistics' CPI in June.

Inflation in the country rose to 210 per cent from the same period a year ago as it continues to go through political turmoil with delays in government formation.

Historic food price increases in Lebanon have resulted in 19 per cent of its population facing some sort of food shortage, the World Bank said.

However, the recent agreement between Russia and Ukraine to free more than 20 million tonnes of grain stuck in Ukraine’s Black Sea ports “could have major implications for global food security and food prices”, the World Bank said.

A cargo ship carrying 26,000 tonnes of Ukrainian corn left the port of Odesa this week, the first such voyage since a deal was signed to reopen a vital shipping lane in the Black Sea.

The Razoni is bound for Lebanon, one of the countries in need of Ukrainian grain, and another 16 ships are waiting to help ease a global food crisis.

Overall, the Ukraine conflict is “having extreme impacts on the world’s poorest countries”, the World Bank said.

Afghanistan, Eritrea, Mauritania, Somalia, Sudan, Tajikistan and Yemen are at the greatest risk of overlapping food and debt crises.

“The countries at highest risk of a debt crisis are experiencing the additional threat of a food crisis,” the lender said.

“Overlapping debt and food crises can have devastating impacts, with international assistance the only solution. For poor countries that depend on food imports from Russia and Ukraine, many of which are in Africa, finding alternative food sources in the short term is difficult, with low regional supply and limited transport and storage infrastructure.”

Since the start of the coronavirus pandemic, these countries’ debt has increased significantly. By the end of 2020, their public and publicly guaranteed debt to foreign creditors reached a record $123.8 billion, up 75 per cent since 2010.

“Increasing emergency aid to at-risk countries is one possible solution to avoid the devastating impacts of overlapping debt and food crises in the world’s poorest countries,” the World Bank said.

“Aid to increase food security in developing countries would help governments provide targeted, cost-effective cash transfers to the most vulnerable segments of their populations.”

In June, the Opec Fund for International Development said it allocated $1bn to boost food security in developing countries hit hardest by the conflict in Ukraine.

As part of its Food Security Action Plan, Opec's development finance arm will provide “immediate assistance” to its partner countries to help them to cover the import costs of basic commodities such as seeds, grains and fertilisers over the next three years.