The Russian-Ukrainian war puts Libya in the face of the wheat crisis and high shipping costs - Report:Pulbished on:
By Hind Issa
Benghazi, 27 February 2022 (Lana) The world's attention these days is turning to the crisis that broke out between Russia and Ukraine and tensions in the region following the Russian invasion of Ukrainian territory, which threatens economic crises worldwide, especially in regard to food security where the Russian attack on Ukraine caused the rise in grain prices globally, causing concerns of major repercussions on importing countries including Libya, which relies heavily on importing its food from abroad, especially cereals and flour.
With a simple reading, Ukraine's competitive role with Russia as a primary source of basic foodstuffs (cereals, oils, meat) for a large number of Arab countries, which depend on wheat imports across the Black Sea, where many Arab countries, including Libya, rely primarily on the import of Russian or Ukrainian wheat to meet their domestic needs, and are generally countries suffering from living crises that may increase the suffering of their peoples as a result of possible increases in wheat prices, as a result of the small volume of supply in the international market.
Wheat exports from Russia and Ukraine account for about 30 per cent of the supply on world markets, as well as for other staples such as maize and vegetable oils. Ukraine is the fifth largest wheat exporter in the world and Russia in the first place, making traders fear that the current war will affect grain movement and prompt importers to look for alternatives to supplies from the Black Sea region.
Libya after the many crises it has experienced, and the drought and the lack of rain that has led to the decline of agricultural crops, not to mention the reluctance of many farmers in the southern regions to grow wheat and barley, due to the lack of government support and the ongoing war and power outages, in addition to not buying their crops by the public or private sector, according to the President of the Association of Farmers of Fezzan "Osman Al-Taher" where Libya's production of wheat and barley during the past year reached 100,000 tons, while domestic consumption is about 1.26 million tons per year.
To find out the repercussions of the Russian-Ukrainian crisis on Libya's import of "wheat", the Libyan News Agency interviewed the Associate Professor at the Faculty of Economics at the University of Benghazi and concerned with economic affairs "Amira Saleh Fleifel" where she explained that all countries will see effects on the economic situation, especially since the two parties (Russia-Ukraine) have a significant impact on the world economy, which means that the world will face problems in the supply baskets whether the air, marine or land, and this will reflect on the volume of food commodities traded in the world, in addition to High bills of insurance companies for goods, which will be reflected in prices, and we will see a wave of rising goods prices, especially in the Arabian Gulf region, which depends on the import of the majority of goods from abroad. The economic expert said Libya’s real crisis will be in shipping, not supply, because war conditions will raise shipping and insurance costs in light of the high risks, even if Libya avoids a shortage of wheat supplies, the direct impact of the Russian-Ukrainian war will be the high value of the subsidy bill by millions and possibly billions of pounds.
"Libya can import wheat from America, Canada, Australia or Argentina, instead of Russia and Ukraine, but this solution has a high price, it will cost the state treasury millions because of distance, high shipping prices, and global supply chains already affected since the start of the Corona pandemic."
The professor of economics explained that the world trade of grain will jump to record levels this season, and Libya's wheat imports may reach 2 million tons per year, stressing that Libya needs to build more grain silos, either around port areas or in the south of the country.
The professor of economics concluded her interview with Lana by saying that Libya has large space, so why not use it in the cultivation of grain, and to take into account such circumstances, and not wait for food stuff to be imported from abroad, but rather Libya should be an exporter of wheat to all the world. She urged the competent authorities in the country to exploit the country's land and restore economic diversity and re-open and renovate the closed factories after the fall of the former regime.
The repercussions of the Ukraine-Russia war and its effects on food in Libya have been the subject of various questions and analyses in Libyan media and websites involving Libyan experts and economists, ranging from pessimism and fear of the impact of this crisis on food security in Libya, to optimism and reducing the seriousness of this dilemma, especially since there are many alternatives available: the trend towards other alternative markets for the provision of wheat and flour commodities, albeit less quality and more expensive.
"Grain imports are increasing in Libya as agricultural projects in southern Libya falter, pointing out that global markets will be directly affected by the crisis and its repercussions, especially given the preoccupation of the wings of power in Libya with internal conflicts," agricultural economist Ali Ghaith said in a press statement. Ghaith pointed out that there is a rise in the prices of bakery flour by 10% to 15%, and that prices are likely to rise again, if the government does not intervene by providing any support for bread.
The Head of Bakers Syndicate in Libya Chrais Abu Gasem" said in press statements that the price of qantar of flour reached 275 dinars on Saturday from 210 on Friday, and that prices are likely to rise if the Ukrainian-Russian war continues, and the government does not intervene to control the market and reassure citizens, especially since wholesalers closed their shops in the face of this huge rise.
Chreis said he was surprised by the excuses of war in Ukraine, despite the fact that the crop to be supplied to Libya is still in the process of cultivation, while the price of the supplier's stock has been rising for several months inside the warehouses of mills companies, pointing out that bakery owners have enough stock for two or three days, and we wait for the intervention of the state, to take the necessary measures.