Libya has gone through enormous political turmoil in recent years with a change of government after protests resulted in the toppling of its long standing regime. The country’s oil industry makes it one of the wealthiest in Africa but most of its area is desert and its agricultural production is small, making it dependent on large-scale imports of products like grains. It also lacks a processing industry of any size which means that much of its grain needs must be imported as flour.

“Libya relies heavily on imports to meet its food requirements, as only 1.7% of the land is arable and the food produced inside Libya is far from sufficient for the population,” the World Food Programme says on its website. “The 2011 conflict combined with international sanctions crippled the economy, which is highly dependent on revenues from the oil sector, and caused severe food shortages. Thousands of Libyans were displaced as a result and tens of thousands of migrant workers fled the country resulting in a shortage in labor.”

The unrest is ongoing and continues to have political repercussions. On Aug. 18, the British Broadcasting Corporation reported that Libya’s Interior Minister, Mohammed Khalifa al-Sheikh, had resigned only three months after taking up the post.

“The interior ministry has come under pressure to deal with violence that has plagued Libya since the 2011 uprising that toppled Muammar Gaddafi,” the broadcaster said. He was the second cabinet minister to quit in two weeks. Awadh al-Barassi resigned as deputy prime minister on Aug. 4.

The country’s ability to use its oil wealth is threatened by the situation. The Agence France Presse news agency reported on Aug. 21 that Libya’s National Oil Company “declared force majeure at its main export terminals on Wednesday, as striking security guards kept up a blockade they launched in late July.”

The move marked a major blow to an industry that accounts for virtually all of the North African nation’s foreign exchange earnings, AFP said.

“Libya’s main oil terminals have been hit by strikes since late July that caused production to plummet to less than 330,000 barrels per day before rising again to 670,000 bpd,” it said. “Even that figure fell short of the 1.6 million bpd averaged before the 2011 overthrow and killing of veteran dictator Muammar Gaddafi.”

It noted that “Libya is almost entirely dependent on oil and gas for its foreign exchange earnings, with hydrocarbons accounting for more than 80% of its GNP and up to 97% of its exports.”

Importer of European wheat

The IGC gives a figure of 100,000 tonnes for Libya’s total wheat production, unchanged from the previous year. It forecasts total Libyan grain imports at 2.5 million tonnes in 2013-14, compared with 2.7 million in 2012-13. The forecast import total includes 1.6 million tonnes of wheat, down from 1.8 million the year before. Barley imports are forecast at 200,000 tonnes, down from 300,000. Traditionally Europe has had the dominant share of the Libyan wheat market at around 40% of its imports, with about 30% coming from Russia and 14% coming from Ukraine.

Sarah Mann, manager of British Cereal Exports, the U.K.’s cereal export promotion body which is part of the Agricultural and Horticultural Development Board, has researched Libya as a potential export market. “In terms of opportunity for U.K. cereals, meeting the tender specification would be quite tough,” she told World Grain. “They need a low moisture and a high Hagberg falling number.

“However, some optimism on future opportunities exists with the developing private sector in Libya which could require different specifications which the U.K. could meet. Therefore, along with other markets in the Middle East region, BCE follows the trade and looks for opportunities as they may arise.”


Britih Cereal Exports recently met with the Libyan Commercial Counselor at the Libyan Embassy in London to discuss the situation there. They heard that the government body NASCO still exists but does not have as much influence as it used to under Libya’s previous regime.

The National Company for Flour Mills & Fodder is responsible for all cereal imports into Libya and operates on a tender basis. The private sector is obliged to import wheat on its behalf, therefore it is not fully independent.

There are still very few mills in Libya and the need to import flour will continue into the future, the counselor said. According to an analysis published by the World Food Programme in 2011, nationally there were 20 privately-owned mills, and 30 publicly-owned facilities. According to Reuters, Libya bought 50,000 tonnes of wheat flour from Russia in July, to come via the Ukrainian port of Kerch. In its most recent quarterly update on world trade in wheat flour, the IGC predicted Libya’s flour imports in 2013-14 at 250,000 tonnes, unchanged from the previous year, but well down on the 366,000 tonnes imported in 2011-12.

There have been reports of problems for Libyan importers. “Libya is having to pay extra for food imports and traders say some foreign firms are diverting shipments elsewhere due to fears — dismissed as unfounded by Tripoli — that growing disarray in the country could delay payments,” the Reuters news agency said in a report in December. “The North African state, much of which is desert, is a big food buyer and has stepped up purchases of staples including wheat and sugar since the end of fighting that toppled dictator Muammar Gaddafi.”

Tripoli shop shelves are now full of foreign produce. But while international traders had viewed oil-producing Libya as a lucrative market, some now say they are backing off from trade, Reuters said.

“Libya has a huge amount of oil wealth, but its chaotic administration and fears about non-payment are still giving it a bad reputation in international trade,” the agency quoted a European Grain trader as saying.

The British group was told there is no biscuit sector in Libya. Libya imports biscuits as a final product from neighboring Tunisia. The whole market was monopolized by Tunisia but Turkey has recently captured a share of the biscuit market in Libya.

They also heard that bread is widely consumed. Many people consume brown bread, especially during Ramadan and other Muslim festivals. There is only one kind of bread flour in Libya. The Counselor said that Libya has been importing wheat from South America.

U.S. exporters are also interested in the Libyan market. In December, U.S. Wheat Associates (USW) invited officials and milling industry executives to the U.S. to learn about wheat production standards.

“The Libyan members of this team include two general managers of major private milling companies operating at the east side of Libya with combined daily milling capacity of 1,600 tonnes,” USW said.

“Because each country must import wheat, both Egypt and Libya make it a policy to provide bread for their people at a very low cost,” said Hesham Hassanein, regional marketing and special projects manager with the USW regional office in Cairo, Egypt. “We want to help prove to both government officials and private buyers that they can rely on the United States as a wheat supplier by demonstrating first-hand the distinctive qualities of U.S. wheat and by building trust in the U.S. supply chain and inspection procedures.”

Key Facts
Capital: Tripoli (Tarabulus)
Population: 6,002,347 (July 2013 est.)
Religions: Sunni Muslim (official) 97%, other 3%.
Location: Northern Africa, bordering the Mediterranean Sea, between Egypt, Tunisia and Algeria.
Government: Operates under a transitional government. Chief of state: President Muhammad Yusuf al-Maqaryaf; head of government: Prime Minister Ali Zaydan (since Oct. 14, 2012).
Economy: Libya’s economy is structured primarily around the nation’s energy sector, which generates about 95% of export earnings, 80% of GDP, and 99% of government income. Substantial revenue from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa, but Tripoli largely has not used its significant financial resources to develop national infrastructure or the economy, leaving many citizens poor. In the final five years of Muammar Gaddafi’s rule, Libya made some progress on economic reform as part of a broader campaign to reintegrate the country into the international fold. This effort picked up steam after UN sanctions were lifted in September 2003 and after Libya announced in December 2003 that it would abandon programs to build weapons of mass destruction. The process of lifting U.S. unilateral sanctions began in the spring of 2004; all sanctions were removed by June 2006, helping Libya attract greater foreign direct investment, especially in the energy and banking sectors. Libyan oil and gas licensing rounds drew high international interest, but new rounds are unlikely to be successful until Libya establishes a more permanent government and is able to offer more attractive financial terms on contracts and increase security. Libya faces a long road ahead in liberalizing its primarily socialist economy, but the revolution has unleashed previously restrained entrepreneurial activity and increased the potential for the evolution of a more market-based economy. The service and construction sectors, which account for roughly 60% of GDP, expanded over the past five years and could become a larger share of GDP if Tripoli prioritizes capital spending on development projects once political and security uncertainty subside. Climatic conditions and poor soils severely limit agricultural output, and Libya imports about 80% of its food. Libya’s primary agricultural water source is the Great Manmade River Project.
GDP per capita: $12,300 (2012 est.); inflation: 6.1% (2012 est.); unemployment: 30% (2004 est.)
Currency: Libyan dinars (LYD): 1.265 Libyan dinars equal 1 U.S. dollar (Aug. 22, 2013).
Exports: $52.12 billion (2012 est.): crude oil, refined petroleum products, natural gas, chemicals.
Imports: $18.1 billion (2012 est): machinery, semi-finished goods, food, transport equipment, consumer products.
Major crops/agricultural products: Wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans; cattle.
Agriculture: 1.6% of GDP and 17% of the labor force.
Internet: Code: .ly; 17,926 (2012) hosts and 353,900 (2009) users.
Source: CIA World Factbook