Bread crisis discussed by Serraj government as prices soar
By Sami Zaptia.
London, 9 August 2018:
The acute bread crisis in western Libya was discussed by a number of relevant parties in Tripoli today, as bread prices soared to three baguettes per dinar at one stage last week in some areas of Tripoli. Most bakeries that were operating were charging a dinar for four baguettes. They used to cost one diner for 20 baguettes before 2011. Many have reported that the size/weight of baguettes have shrunk as bakeries tried to cut down on the use of their dwindling flour supplies.
The official report of the meeting by the Media Department of the Faiez Serraj Presidency Council and Government of National Accord said that the meeting met ‘‘to discuss the root causes of the flour crisis and the high price of bread, with a number of specialists including the Assistant Undersecretary of the Ministry of Economy, the president of the Federation of Chambers of Commerce and industry, the president of the General Association of Bakeries the director of the marketing department General Company for Mills and Fodder and a number of manufacturers in the field of mills and fodder.
It said that the main reasons for the shortage of flour, the high price of bread and how to establish controls to prevent a recurrence of the crisis were reviewed. The meeting agreed on a number of proposals to be forwarded to the President of the Presidential Council (Faiez Serraj), including the need to review the licences of bakery owners so that the authorization of the exercise is approved by the relevant authorities, as well as companies and businesses in the field of mills and fodder.
It added that agreements should be concluded with the Ministry of the Economy and the Bakery Association to determine the proportions of flour distributions to bakeries, and that the mills ‘ owners would work to implement some recommendations that would contribute to ending the crisis in the coming days.
Although the report said that the meeting was held to look at the ‘‘root’’ causes of the flour shortage and bread crisis, the official report did not mention subsidy reform and the fact that bakeries rely overwhelmingly (about 80 percent of consumption) on hugely subsidized imported grains and flour which is paid for with hard currency.
Libya’s acute economic crisis caused by a fall in its oil production and world crude oil prices, mean the Libyan state has less hard currency to import flour and grains. Equally, because the flour is hugely subsidised, much of it is diverted, sold onto ‘‘ghost” bakeries and the black market within Libya to confectionary makers and smuggled to Libya’s neighbouring states.
The Bakeries’ Union estimated in May that there were 1,200 ghost bakeries. The phenomenon is leading to a shortage of flour, bread and fuel, as bakeries also receive their quota of subsidised fuel, it had added.
The Ministry of Economy had also announced that it had reviewed security procedures for transporting flour and assured that grains will be imported and milled locally. Milling grains locally offered better value and also benefited other industries such employment, local mills and animal feed, the Ministry had reported.
The Bakeries’ Union estimated that Libya consumes about 800,000 tones of flour distributed to about 5,500 bakeries.
The Central Bank of Libya and the Faiez Serraj Presidency Council have been discussing economic reforms, which include subsidy reform for a while, but have yet to reach any decisions.