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Interview: Minimal disruption to grain supply from Beirut blast: FAO representative

Highlights

Port partially functional; port of Tripoli alternative

No major disruptions to imports reported so far

Feed corn destroyed in blast close to 40,000-50,000 mt

New Delhi — The agriculture industry in Lebanon is recovering as the Beirut port, which was rocked by a massive blast Aug. 4, is now partially functional, while the Tripoli port has emerged as an alternative to support some shipments, Maurice Saade, the UN's Food and Agriculture Organization's representative in Lebanon, said.

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Beirut is the main port in Lebanon, followed by the second busiest -- the port of Tripoli.

Lebanon imports nearly 85% of its food supplies, including major grains like wheat and corn, and Beirut port is essential to the country for that.

"The disruption caused by the blast is not as prolonged as we had thought earlier," Saade told S&P Global Platts in an interview.

The port of Beirut is not 100% functional as of now, but the container terminal is now fully functional, and that's where the port has 70% of the goods, he said.

Other than the extra bit of time that is added by diverting some shipments to the port of Tripoli, there are no major reports of disruptions to imports, he added.

According to the FAO, in the 2020-21 marketing year (July-June), cereal imports into Lebanon -- mainly common wheat and feed corn -- are forecast at 2 million mt.

Lebanon imports most of its wheat from Russia and Ukraine, while corn is imported from the Black sea and Ukraine.

Negligible impact on agriculture

"The accident itself I don't think will have much impact on the agriculture or food sector," Saade said.

"Originally, there were some concerns about destruction of the silos, and that there might be some issues to food security and availability of food grains, but turns out that the stocks destroyed were not that big -- it was only 15,000 mt of wheat," he said.

He added it calculates to nearly 10% of total wheat that Lebanon imported in the previous marketing year.

However, Saade said the explosion destroyed around 40,000-50,000 mt of feed corn that was stored at the silos.

"I understand there were some shortages of corn for a week or two, and the commercial poultry producers substituted wheat for corn," he said.

Saade added since most of the corn shipments in Lebanon come from the Black Sea and Ukraine, which are not that far from the country, the shortage of corn should be short-lived.

He said it was difficult to estimate how much grain stocks Lebanon has as of now, as most of it is privately held.

Economic crisis to hurt farmers

"The blast did not affect the availability of agricultural inputs, even though that's been really affected by the economic crisis," Saade said.

Lebanon imports most of its agricultural goods and the cost of these inputs has skyrocketed due to the devaluation of the Lebanese currency.

According to reports, till early August, Lebanon's currency had plummeted to record lows, losing more than 80% of its value since October 2019.

Agricultural production in the country in 2020 is estimated to be down on the year in Lebanon due to the high prices of agricultural inputs like fertilizers and pesticides, and declining liquidity, Saade said.

"Traditionally, the suppliers of agricultural inputs used to supply to farmers on credit. Now they are requesting advanced cash payments, so farmers are faced by this dual problem that first they have to pay prices at much higher rates because of the devaluation of price, and they have to pay in cash," Saade said.

Following the blast at Beirut port, the UN's World Food Programme (WFP) is providing wheat flour to ensure there is no shortage, Saade added.

"Also the WFP is establishing temporary storage for imports so we should not expect any disruption to the flow of imports," Saade said.

According to an UN report, WFP is delivering 17,500 mt of wheat flour and a three-month supply of wheat to Lebanon.

It is also bringing in equipment to render the Beirut port operational enough so that wheat and other bulk grains can be imported.