The subsidized goods are missing … and the worst has yet to happen

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The prices of foodstuffs continue to rise continuously, and the Lebanese markets are still awaiting the outcome of the political tensions between the three presidents, whether in terms of breakthrough or complexity, as the exchange market witnessed a remarkable deterioration of 650 Lebanese pounds against the dollar in less than 24 hours and is still swaying between increase and decrease. Seized, according to what was mentioned in “Nidaa Al Watan”.

While several countries decided to exempt basic commodities from customs duties for a period of 6 months due to the losses they incurred due to the “Corona” pandemic, or the reduction of sales taxes, or at least the imposition of punitive duties on merchandise monopolists, which would positively affect the selling price to the consumer, it was absent. The Lebanese state refuses to offer any radical solutions in light of the lack of ministerial capacity to control and conduct business in a way that suits the economic problems, until the matter came to averting the issuance of hybrid monopolistic laws in some supermarkets, for which no one is held accountable.

Rationing has begun … fuel and foodstuffs

Al-Akhbar newspaper pointed out that the Banque du Liban has begun to effectively rationalize subsidies. It revealed that the fuel importers, who used to import four ships a month, for example, now import three. They did not reduce their import by will, but the Banque du Liban, after it used to approve the subsidy within a week, needed between ten and 15 days or more for approval. The same is true of foodstuffs. After the bank deliberately reduced the quota allocated to the ministries of economy, agriculture and industry from 220 million dollars to 80 million dollars, it became evident that those ministries reduce the amounts that they agree to import.Al-Akhbar indicated that traders working in the subsidized materials complain about the delay of the Banque du Liban in paying foreign suppliers, which also leads to delays in the arrival and distribution of shipments. According to Al-Akhbar information, this behavior has begun to constitute a burden on importers, some of whom withdraw the files submitted to the Ministry of Economy to obtain support, after they decided to stop trading in subsidized materials.

A kilo of beans for 19 thousand and garlic for 20 thousand!

In a related development, Al-Akhbar reported that the price of a kilo of sweet peppers yesterday reached 9,000 pounds, and a kilo of cowpea reached 19,000, while the price of a kilo of garlic exceeded 20 thousand. According to figures from the Consumer Protection Association, the price increase has affected all kinds of weeds and most types of fruits. But this may only be the “beginning” of the disaster, with further price hikes expected in the next few days. Ibrahim Tarshihi, head of the Bekaa Farmers and Peasants Association, said, “The price brake depends on the conduct of farmers’ transactions pending between the Ministry of Economy and the Bank of Lebanon.”

Tarshihi explained that the subsidy reached about 50% of agricultural input transactions, such as seeds, fertilizers and medicines. “It is required that the support be completed so that the prices of products are not permanently affected by the continuous rise in the dollar price on the black market.” On 3900 pounds, in exchange for running the remaining transactions, “prices will remain almost constant in the coming period.”

In parallel, the prices of the rest of the foodstuffs continue to change daily, according to the exchange rate sometimes, and the mood of the merchants sometimes, while the “Crisis Observatory” at the American University of Beirut warned that “the worst has not yet happened.” He explained, in a statement, that the continuation of some services, such as rents and fees related to health, education and housing according to the official exchange rate, contributed to not increasing them significantly, noting that spending on the last three chapters constitutes 43% of families’ budgets in Lebanon. However, the “stability” in the prices of these services will not continue in light of the depletion of foreign currency reserves. Therefore, the Observatory warned that “the lifting of subsidies will take matters into a dangerous direction due to the complete erosion of the purchasing power and its disappearance for most Lebanese and workers in Lebanon who receive their salaries in Lebanese pounds, such as workers in the public sector and security and military agencies.”

The increase in the prices of goods in supermarkets has also accelerated to keep pace with the high flight of the dollar, which increases the decline in purchasing power, inflation and the unprecedented collapse of the Lebanese pound, so why is the commodity price counter tireless and tiresome and records daily increases in the supermarkets?

According to Nidaa Al Watan, the existing equation between the merchant and the importer says: “It is not possible to follow a rule. If the merchant buys the goods at the old price, he must sell those goods at the same price,” Hani Bahsali, head of the Food Importers Syndicate, explained to “Nidaa Motherland”. He added, “The capital of the importer is the commodity, not its price in Lebanese pounds. If a commodity has a value of one dollar, the importer must collect the dollar in order to import something else.” If he sells that commodity at a price of 8,000 pounds, which is the price that the dollar was at when he bought the product, and not 10 thousand pounds, which is the current price, then the importer cannot get the amount he needs to buy the commodity, and this is included in the principle of the replacement cost, as the prices rise automatically when it increases. The exchange rate of the dollar, but in return, even if the goods are calculated at a high price and the dollar exchange rate has decreased, the prices must also be reduced. ”This does not actually happen on the ground until after a period of time to stabilize the decline.

Here, he returned and assured Bohsali that “the principle of pricing between the importer and the retailer is the dollar and the brand, and not with a high and a low dollar. The principle is to collect the price of the goods that will be imported.”

More headroom

If prices are going to rise further, due to the pessimistic atmosphere and promising that there are no limits to the exchange rate. In this context, Bohsali said: “We have entered a new cycle of increase in prices resulting from the rise in the exchange rate, and this trend has continued since the rise of the dollar from the level of 1515 pounds to the present day, and what is frightening today is the consensus on the continuation of the dark atmosphere and with it the rise of the dollar.”

As for subsidized goods, he pointed out that “the subsidy is optional, and the trader is not obligated to import subsidized items, noting that some traders prefer to import goods from their capital, due to the delays of the Banque du Liban in disbursing funds.”

This has raised the scarcity of foodstuffs during the last period, fears of families about the continuation of the situation, prompting some to buy quantities of basic materials and commodities and “mortar” and store them in homes, which exacerbated the situation, says Lara Abdul Malik, who works as a saleswoman in one of the largest stores. In Beirut, “Nidaa Al Watan” continues, “First, we have to admit that our families, especially those who were in Lebanon during the civil war, suffer from a bit of” Troma “and fear of tomorrow, and some tend to store items that can be stored, such as lentils, beans, rice and chickpeas. … and they are somehow right, as commodity prices change almost weekly, to very regrettable degrees. ” In response to the question, “What are the most products that you think have become fanciful”, she said that they are “sanitary pads”, as according to her, the majority of girls buy maternity pads, because they are the cheapest and have a greater number of pads, although they are not suitable for going out. “She continues,” she is no longer only A pink tax, it has become an existential tax. “





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