Fears in Libya of bread revolt due to price increase

The Libyan Government's National Accord Food Control Centre (GNA) announced an agreement to return the price of bread to its previous level. A decision was made to avoid what observers described as a "bread riots" that could erupt across the country at any time as a result of widespread anger among Libyans over the sudden rise in the price of bread.

The head of the bakers' union, Saeed Boukhreiss, accused public and private milling companies of raising the price of flour to its highest level, i.e. 220 dinars. He said that these companies raised the price of ingredients used in bread making, such as yeast, oil, salt and sugar.

The food control centre said it decided to restore the previous price of bread during a meeting with the general director of the flour milling and feeding company, the director of the Tripoli municipal guard and members of the bakers' union.

The members of the food control centre stressed the need for all bakeries to comply with established health standards and specifications and not to use prohibited foodstuffs in the production of bread.

The Ministry of Finance of the GNA said in a statement that Minister Faraj Boumtari discussed with the head of the bakers' union the situation of bakeries following the increase in flour prices that led to the rise in the price of bread. The meeting was devoted to an examination of the production process in bakeries and the availability of flour and wheat in mills and bakeries and the possibility of expediting the supply of sufficient stocks.

The statement indicated that both parties stressed the importance of bakeries adhering to bread making controls and prices set by the ministry and the supervision of bakeries by the control authorities. The head of the union said that there is continuous communication with the bakeries and that there is a commitment to adhere to these controls.

But analysts stressed that the rise in the price of bread is one of the negative repercussions of the 230% rise in the exchange rate of the dollar against the Libyan dinar after the decision to unify exchange rates came into effect in January.

The head of the bakers' union explained that the mills raised the price of flour to 210 dinars per quintal, which is about $47, after it had previously been 155 dinars, or about $35 per quintal, indicating that "the prices of all components of the bread industry have increased, especially oil, salt and yeast".

On 3 January, the Central Bank of Libya began to apply a new exchange rate of 4.48 Libyan dinars to the US dollar, after the authorities in the west and east of the country reached an agreement on this matter last December, bringing the exchange rate close to its value on the black market, where the exchange rate of the official dollar before this movement was around 1.4 dinars.

Local activists said that three loaves of bread are now being sold for one dinar, as the price of bread rose from a quarter of a dinar to 33 dirhams, as the Tripoli municipality warned on Thursday that legal action will be taken against speculators making a profit on the price of bread.

The activists added that the high price of bread could lead to popular unrest throughout the country. They stressed that the population lacks most basic services, and has nothing left but a loaf of bread, which is now in danger as a result of the failed policies of the National Accord Government.

In the east of the country, the news agency affiliated to the Libyan interim government said: "The news of the increase in the price of bread by some bakeries in Benghazi has provoked the anger and resentment of the citizens, who have long suffered from cash shortages and delayed payment of wages, in the face of rising dollar exchange rates, putting the people in a desperate situation. ”

The agency quoted the official spokesman of the Municipal Guard, Captain Ibrahim al-Talhi, as saying that the agency had received several complaints from citizens about the high price of bread.
He stressed that the role of the municipal guard is to ensure supervision, not to legislate, which means that it is not up to them to set or change any prices. Their only role is to monitor the attitude of the competent authorities and the degree of their commitment to maintaining prices.

Attia al-Mahdi al-Fitouri, a professor of economics at Benghazi University, said the price of a loaf of bread has been rising for some time, and that the government cannot monitor and impose a specific price on bakeries.

He indicated that the size of a loaf of bread changes often, and it does not have a specific size or weight. Fitouri also accused the Central Bank of Libya in Tripoli of contributing indirectly to price increases.

He stressed that "the stability of the economy is more important than the decline in reserves; because reserves are meant to stabilise the economy, and Libya has reserves that can last for more than five years, even if the oil pumps are closed.

Libya consumes 1.3 million tonnes of wheat a year to meet the needs of the local market, 75 % of which is imported following the fall in domestic wheat production to 250 000 tonnes.

There are 4 160 bakeries in various parts of Libya, in addition to 57 flour mills.

Parties close to the GNA tried to justify the position by the increase in the price of wheat on world markets.

Muhammad Al-Ra'id, a member of the parallel parliament in Tripoli and of the Chamber of Commerce and Industry, said: "The high price of flour in Libya is due to a 20 percent increase in the price of flour on the world market, and has nothing to do with the adjustment of the exchange rate.

He noted that the price of flour will rise by 18 percent and that the Central Bank of Libya has not opened credit for wheat imports since last August.