Focus on Libya

by Meyer Sosland
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Libya, on the Mediterranean coast of Africa, is a sparsely populated country and a wealthy one, thanks to the vast amount of oil that it produces.

Conversely, Libya’s agriculture sector is tiny, meaning that it has to import most of its food. Despite a history of problematic relationships with the rest of the world, Libya is currently flour milling’s biggest international customer.

The total area of the Great Socialist People’s Libyan Arab Jamahiriya is more than 1.75 million square kilometers, which makes it far bigger than any of the countries of Europe. However, its population is just over 6 million.

Oil accounts for around 95% of Libya’s export earnings and roughly one quarter of its gross domestic product (GDP). Since the lifting of United Nations (UN) sanctions in September 2003 and the end to unilateral sanctions by the United States in April 2004, Libya has been able to attract more foreign investment into the energy sector. Libya’s National Oil Company has set a target of nearly doubling oil production to 3 billion barrels a day by 2010.

It adds up to an estimated per capita GDP figure for 2006 of $12,300, one of the highest in Africa.

Libya’s political system is unique. Part of the Ottoman Empire until 1911, it was dominated by Italy until that country’s defeat in World War II in 1943. It was administered by the UN until it achieved independence in 1951. Colonel Muammar Abu Minyar al-Qadhafi took over in 1969 and runs the country according to a political system called the Third Universal Theory.

Agriculture provides just 7.3% of GDP, and arable land accounts for only 1% of the total. There are just 4,700 square kilometers of irrigated land. Even with its relatively small population, Libya has to import around 75% of its food.

The weather doesn’t help. Libya’s climate is best known for the hot, dust-laden Ghibli, a southern wind that lasts for one to four days in spring and fall. It’s also prone to dust storms and sandstorms.

There’s a shortage of water. The Great Manmade River Project, which is the largest water development project in the world, aims to bring water from deep aquifers under the Sahara to coastal cities. The aim is to supply a total of 6 million cubic meters of water per day, with

30% allocated for domestic and industrial use and 70% used to irrigate around

200,000 hectares of existing and newly reclaimed agricultural land. The aim is to relieve pressure on coastal aquifers, which are coming under intense pressure of use and suffering sea water intrusion as a result.

By expanding agriculture, Libya aims to encourage rural people to stay on their land, thus relieving pressure on big cities like Tripoli and Benghazi. Libya also aims to achieve a greater level of food security. The area being targeted covers around 16,000 private farms ranging from one to 60 hectares in size.

Libya’s grain production is miniscule. The International Grains Council (IGC) rounds its figure for durum wheat to 100,000 tonnes, a number that has been steady for every year covered in the IGC’s latest Grains Market Report and is the same as the figure quoted by the IGC for all wheat. Its imports of durum wheat are put at 120,000 tonnes this year, the same as in 2006-07. According to the IGC, durum shipments to Libya in 2006-07 (July through May) were 115,000 tonnes from Canada, compared with 33,000 tonnes the year before, which represents all of Libya’s durum imports that year.

As well as the durum wheat from Canada, the European Union (E.U.) is set to send 444,000 tonnes of wheat to Libya in 2006-07, compared with 891,000 tonnes the year before. Libya’s total wheat imports are forecast to come to 1.4 million tonnes in 2007-08, compared with 1 million in 2006-07 and 1.7 million in 2005-06.

Libya is a major buyer of flour on the international market, to the point where it now looks as though the slowdown in imports by Iraq could make it the world’s biggest flour importer in 2006-07. According to the IGC’s most recent estimate, Libya’s flour imports in 2006-07 were 950,000 tonnes, well ahead of Iraq’s 800,000 tonnes. The year before (2005-06), Libya imported 1.15 million tonnes of flour, well behind Iraq, which bought 1.5 million tonnes. The IGC’s estimates do not include durum semolina.

The IGC noted that Libya’s imports from the E.U. and Turkey had fallen sharply in 2006-07, but it acknowledged that that might not be the whole picture. "Strong domestic demand is likely to have been met through unreported regional purchases," the Council said. E.U. exports of flour fell sharply across the board in 2006-07, but the IGC pointed out sales to Libya showed the sharpest fall, with shipments down by more than half.

Libya has been going through some economic liberalization, and the grains sector has been part of that trend. The government is believed to have made up to $167 million from the sale of General National Company for Flour Mills and Fodder, at the time its second largest public company.

The company’s plants include five flour mills with a total capacity of 1,710 tonnes a day as well as three semolina mills with a capacity of 1,030 tonnes a day.

Its sale was part of a plan for the divestment of some 360 state enterprises launched in 2004. At the end of 2005, the IMF said that only 66 companies had been sold off.

Negotiations for Libyan membership in the World Trade Organization are expected to start in the second half of 2007. The WTO’s General Council agreed in 2004 to set up a working party to look at Libya’s application. While the application is in progress, Libya, which first applied to become a member in 2001, has the status of an observer at the WTO.

Despite Libya’s dependence on imports, less than 2.5% of the population suffers any sort of undernourishment, according to the U.N. Food and Agriculture Organization (FAO).

The FAO puts average dietary energy consumption at 3,330 kilocalories per person per day, with 1,311 coming from wheat alone. The FAO put the value of Libya’s wheat flour imports in 2005 at $369 million, on the basis of a quantity of 958,595 tonnes. Its wheat imports that year were worth $104 million for a quantity of 410,325 tonnes. Libya also imported 317,206 tonnes of maize, worth $62.17 million, and 266,698 tonnes of barley, worth $43.1 million.

Even though its farm sector is small, Libya does export some food, according to the FAO. Topping the list is 1,022 tonnes of skin dry-salted sheep ($4.7 million) and 1,087 tonnes of skin with wool sheep ($1.6 million). Cereal products are way down the list. According to the FAO, the only cereal products on the top-20 list of Libyan food commodity exports in 2004 were wheat flour and milled paddy rice. The total it shipped abroad was 67 tonnes of wheat flour at a value of $14,000 and 20 tonnes of milled paddy rice worth $9,000. WG

Chris Lyddon is World Grain’s European editor. He may be contacted at: