Explosions cost Lebanon dearly in food supply

Grain storage silos destroyed,but wheat shipments on way

The deadly explosion in Lebanon's capital of Beirut tore through major grain silos, stoking fears of shortages in a nation that imports nearly all its food and is already reeling from economic crisis.

Tuesday's blast, which killed at least 135 people and injured thousands, occurred next to a storage facility for grain in the city's port, most of which was wrecked.

Video footage appeared to show grain spilling from the silos, which have a capacity of 120,000 tons. The government said the storage facility was mostly empty but that the stocks that were there are unusable.

Most other food at the port, which handles 60% of Lebanon's imports, was also ruined, according to Bob Jabra, a partner at local commodity trader Ibrahim Jabra & Sons. The company lost 10 containers of rice, or 250 tons, Jabra said.

Beirut's governor estimates the cost of the damage will amount to between $3 billion and $5 billion.

"The damage is massive at the port, and it will take a very long time to fix and build," Public Works Minister Michel Najjar told local television. Lebanon's second-largest city, Tripoli in the north, will serve as an alternative port, possibly backed up by Sidon and Tyre, Najjar said.

A ship carrying 5,500 tons of wheat from Ukraine was expected to arrive at Tripoli on Thursday, the official National News Agency reported. The northern port expects an additional three vessels in the next few days, it said.

Lebanon has enough of the grain to last around six weeks and shouldn't face deep shortages, according to Ahmed Hatteet, the head of the country's association of wheat importers.

"The amount of flour in the market and on its way to Lebanon covers the market's needs for a long period, and therefore there's no flour or bread crisis," said Raoul Nehme, the economy and trade minister.

Food importers were scheduled to meet Nehme on Wednesday to discuss the situation.

Lebanon relies on privately owned mills to ship wheat from Ukraine, Russia and other European countries. The government used to buy wheat from local farmers at above-market prices but hasn't done so in years.

The explosion adds to Lebanon's woes. The Arab country has been battered by the coronavirus pandemic and is suffering from its worst financial crisis in decades. The government defaulted on around $30 billion of Eurobonds in March and has been trying to get a bailout from the International Monetary Fund.

Shortages of foreign exchange, fuel and food have caused prices to rocket. Inflation in June stood at 90% overall, and for food alone it was 247%, according to the government's statistics agency.

The blast will "exacerbate the grim economic and food security situation," the United Nations' World Food Program said in a statement. One million people in Lebanon already live in poverty, and the country depends on imports for nearly 85% of its food, the agency said.

"If Beirut's port is effectively being taken out of commission, it's going to add to the already existing disruptions to the supply chain," Khatija Haque, head of research for the Middle East and North Africa at Dubai-based bank Emirates NBD PJSC, told Bloomberg Television. "Given that so much of Lebanon's needs are imported, it could eventually put further upward pressure on prices."

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