Prices of locally-produced goods have been soaring inexplicably in Lebanon, a report by Information International has indicated.
According to the report, between late 2019 and May 2021, prices of various commodities and food products rose by varying percentages that range between 200% and 1,000%, depending on whether the item is imported or locally produced.
The report notes that some products, especially fruits and vegetables, have seen a significant price jump despite the materials needed in their cultivation (such as seeds, fertilizers, and pesticides) being subsidized by Lebanon’s Central Bank.
“These materials are subsidized by the Banque du Liban and, therefore, the increase, which ranges between 300% – 500%, is unjustified and a cause for questioning the causes that are still unknown,” it says.
The Watermelon Question
One example that the report investigates is watermelon, the price of which is high with the approach of summer.
It is known that throughout March and April of every year, i.e. before the start of the watermelon season in Lebanon, the country imports the fruit from Jordan and Egypt.
During these months of 2021, watermelon sold for LBP 12,000 – LBP 15,000 Lebanese pounds per kilogram ( LBP 120,000 – LBP 150,000 per watermelon) before dropping to LBP 10,000, compared to LBP 3,000 (LBP 30,000 per watermelon) in the same period last year.
In mid-May this year, locally-produced watermelons entered the market, selling at LBP 7,000 per kilogram, compared to last May’s LBP 2,000 — an increase of 250%.
“This increase goes back to the trader and the farmer together, as the price of a kilogram in the farmer’s land has reached LBP 3,500, while its cost (land rent, plowing, irrigation, seeds, fertilizers, pesticides) does not exceed LBP 500, achieving a profit of LBP 3,000 per kilogram,” the report says.
On the other hand, the trader pays LBP 800 per kilogram in transportation costs, which brings the total cost up to LBP 4,300, generating a total profit of around LBP 2,700 per kilogram of watermelon.
In other words, “the cost of planting and transporting one watermelon weighing 10 kilograms is LBP 13,000, to be sold at LBP 70,000, i.e. a profit rate of 438%.”
It’s worth noting that watermelon is not the kind of fruit that needs to be sold quickly for freshness concerns, as it can be stored for weeks and sold at the same price, which supports the question that the report poses: “A watermelon is for LBP 70,000, why?”