Chaos hits Lebanese food market, merchants may close stores

Special Chaos hits Lebanese food market, merchants may close stores
A Lebanese woman stands next to her empty refrigerator in her apartment in the port city of Tripoli north of Beirut on June 17, 2020. (AFP)
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Updated 26 June 2020

Chaos hits Lebanese food market, merchants may close stores

Chaos hits Lebanese food market, merchants may close stores
  • Governor of Central Bank of Lebanon: Amount of money circulated on black market is very limited
  • Caritas charity: Those who donated to us are now asking for help

BEIRUT: The governor of the Lebanese Central Bank said on Friday that the amount of hard currency circulating on the black market was very limited.

Riad Salameh, governor of the Banque Du Liban (Lebanese Central Bank), said: “Pumping US dollars into the market has stabilized the exchange rate of the Lebanese pound to the US dollar at 3,850 Lebanese pounds to $1.”

Salameh’s statement came as the Banque du Liban launched the “Sayrafa” electronic platform for exchange operations of US dollars to Lebanese pounds.

The food and basic commodities market saw unusual rigidity as the exchange rate of the dollar on the black market reached 7,000 Lebanese pounds to $1, while the official exchange rate remained nominally at 1,515 Lebanese pounds to $1.

Lebanese President Michel Aoun declared during a meeting with a delegation from a charitable organization that “the capabilities of the state are now very limited.”

Professor Nasser Yassin, an expert in development affairs, said that there had been a “huge decrease in the average salary in Lebanon from about $1,333 to $279 dollars per month, based on an exchange rate of 7,000 Lebanese pounds to $1.

Yassin told Arab News that the average salary in Lebanon was now below the average salary in most countries in the region, with the exception of Iran and Syria. This was after Lebanon had been ahead of all other countries in the region.

On Friday, the owners of food shops, supermarkets, restaurants and butchers closed their stores temporarily due to the spike in the exchange rate of the US dollar, which left people unable to buy food and goods.

“Sales have fallen by 70 percent. Lebanon buys lamb from Syria, and the majority of merchants selling lamb are Syrians. They now insist on getting paid in US dollars after they used to be paid in Lebanese pounds. And even when they accept payments in Lebanese pounds, they do so according to the US dollar exchange rate on the black market,” said Mohammad Bayan, an owner of a big meat shop in Shwayfat.

The price of 1 kg of lamb has increased from 24,000 Lebanese pounds to 85,000 Lebanese pounds, and the price of 1 kg of beef has increased from 17,000 Lebanese pounds to 50,000 Lebanese pounds.

Lebanon imports lamb from Australia and beef from Brazil, the Netherlands and other European countries.

Bayan said: “Whoever used to buy lamb meat is now buying beef meat, and whoever used to buy 2 kg of meat per day is now buying only 250 gm.”

Abbas Ali Sleem, the owner of a meat shop in a southern suburb of Beirut, said: “Butchers have decided to stop selling meat after they sell out their current stock.”

“The purchasing power of the people has declined, and there are people asking to buy meat worth 5,000 Lebanese pounds, which is less than $1,” he said.

Protesters continued to take to the streets in various regions and to block traffic in protest against the deteriorating economic conditions and the high exchange rate of the US dollar. A number of protesters stormed the Ministry of Social Affairs on Friday and asked to meet Minister of Social Affairs Ramzi Musharrafieh, who turned out not to be in his office.

“The ministry is a public facility and they have the right to be in it especially as its role is very important in these special circumstances, and that the minister is not doing his duty toward the citizens,” the protesters said in a statement.

“Merchants are suffering from difficulties in securing the US dollar to purchase food products, and the situation remains unchanged, causing concern about the possibility of reaching a crisis in the upcoming months,” said Hani Bohsali, president of the Syndicate of Importers of Foodstuffs, Consumer Products and Drinks.

Bohsali said: “Merchants are enduring daily losses due to the high exchange rate of the US dollar and due to their inability to fix the prices of goods, which gives them two bitter options — either raise the prices of goods that would render them very expensive, or sell at a loss that might reach 50 percent with further fluctuations in the US dollar exchange rate. The issue is no longer related to making profit, and it would be better for merchants to close their stores rather than sell at a loss.”

Father Michel Abboud, president of the Caritas-Lebanon charity, met President Michel Aoun on Friday and warned of “the dire situation in Lebanon as children are coming to Caritas asking for food, while new classes of poor people have emerged. They used to make donations to Caritas and now they are asking for help.”

Meanwhile, Interior Minister Mohammed Fahmy said: “Theft and pickpocketing have increased steadily in the past few weeks due to the difficult economic situation and hard living conditions in Lebanon, and the internal security forces are doing their best to counter this phenomenon.”