Foreign currency access to
food, raw material importers
Ceiling of $300,000 per manufacturer
The Central Bank (BDL) will provide in the next 12 months access to foreign currency financing for imports of basic food products and imports of raw materials used in the industrial sector, according to two BDL circulars.
The banks may ask BDL to provide up to $100 million or their equivalent in other foreign currencies for financing 90 percent of the value of raw materials imported by licensed industrial firms.
An industrialist can benefit from facilities of up to $300,000 or their equivalent in other foreign currencies.
The Ministry of Industry will issue the modus operandi of this program and the conditions required for benefiting from the facilities.
Exporters benefiting from this scheme must transfer to Lebanon no less than the equivalent of the value of raw materials used in the manufacture of the exported products.
BDL’s decision mainly targets manufacturers who sell their products on the local market and can’t transfer money abroad to pay for raw material imports. According to the Association of Industrialists, these facilities cover only two weeks-worth of raw material imports as the industrial sector’s import financing requirements are $3 billion per year. Out of an annual industrial output of $13 billion, nearly $3 billion is exported which is equivalent to the annual needs for funding raw material imports.
According to one of BDL’s two new circulars, banks can get foreign currency financing from the Central Bank on behalf of importers and producers of basic foodstuff.
The exchange value of foreign currencies used for food imports will be computed according to the market price set by BDL.
Importers of raw materials used in food industries included in a list issued by the Ministry of Economy and Trade (MoET) will benefit from these facilities. The list includes sugar, rice, legumes and sesame provided these supplies are packed in bags of over 20 kilos, raw materials for the production of edible vegetable oils, yeast in industrial packages, powdered milk for individual consumption for over one-year olds, canned tuna, powdered milk used in dairy production, microbial rennet for yogurt production used in the dairy industry, dairy cows, dairy goats and sheep, fodder, veterinary medicines and vaccines for livestock and poultry, fertilizers packed in bags of more than 20 kilos, seeds of vegetables, seeds and seedlings of fruit-bearing trees, and potato tubers.
Raoul Nehme Minister of Economy and Trade said that this list covers the basic food requirements of citizens including animal and vegetal proteins, carbohydrates, and other components. He said that this list could not include more foodstuffs because of the limited resources of the government.
According to the MoET, importers of food products benefiting from BDL program are not allowed to re-export them. They must price their products in lira and should set the maximum retail price in advance.
The volume of imports that can benefit from the program must not exceed the average annual quantities imported in the two previous years. Purchase orders with the lowest price will be given priority, according to the MoET.
Reported by Shikrallah Nakhoul
Date Posted: May 28, 2020