BEIRUT, LEBANON — Millers in Lebanon are warning that the country’s flour production is being threatened by low wheat reserves stemming from currency issues, Reuters reported.
In statement released on Sept. 24, the Lebanese millers’ association urged officials to find a solution for dollars to be supplied at the official price, “so owners of the mills can resume their work and import the country’s wheat need.”
Dollars and pounds are legal tender in Lebanon, and the Lebanese pound has been pegged against the dollar at a level of 1,507.5 pounds for more than two decades.
The millers’ association said converting Lebanese pounds to U.S. dollars has become very costly, which has led them to issue invoices in U.S. dollars “to preserve operating capital and the continuation of our work.”
It said the wheat reserve at the mills “has fallen to a level that represents a danger, and this may expose the country to a supply crisis if the U.S. dollar problem is not resolved.”
Hassan Assaf, a member of the millers’ association, told Reuters that banks had been gradually curbing supply of dollars for the past two months and that wheat reserves held by private millers had fallen to 1 ½ to 2 months of supply from four months.
Lebanon millers are highly dependent on wheat imports. In 2018-19, the country produced only 130,000 tonnes of wheat while importing nearly 1.6 million tonnes.