Lebanon: Prices of Food Commodities on the Rise Despite Drop in Exchange Rate

Citizens in a fruit and vegetable market in Beirut, Lebanon (Reuters)
Citizens in a fruit and vegetable market in Beirut, Lebanon (Reuters)
TT

Lebanon: Prices of Food Commodities on the Rise Despite Drop in Exchange Rate

Citizens in a fruit and vegetable market in Beirut, Lebanon (Reuters)
Citizens in a fruit and vegetable market in Beirut, Lebanon (Reuters)

Lebanese citizens are getting accustomed to the increasing prices of the food commodities, but they believe the prices will drop with the decline in the exchange rate.

However, this is not the case as a small tour to the market reveals that prices are still increasing, and when asked about the rates of the items, merchants usually respond that it varies each hour depending on the exchange rate.

The Consumers’ Lebanon index shows that prices increased 22.84 percent during August when compared to April, May, and June. However, the price of the US dollar in the exchange market did not exceed 8,000LL since the second week of August, and it even fell below 7,000 LL on some days.

Consumers’ Lebanon is an association that is concerned with the protection of the rights of the Lebanese consumers.

The biggest increase during August was in the price of meat, as it rose 32.70 percent, followed by the prices of canned foods, oils, and grains which saw a 28.60 percent rise. Some types of bread increased 25 percent and dairy products’ prices increased 18.20 percent, while vegetables and fruits had the lowest increase rate with 21.38 percent and 1.8 percent respectively.

Vice President of Consumer’s Lebanon Nada Nehme said that the prices of food commodities continue to rise amid the absence of any supervisory role and in an environment controlled by monopolies.

She told Asharq al-Awsat that merchants control prices claiming they bought the commodities at a high rate, explaining that this does not justify selling the same product at the same high price when the exchange rate drops.

Nehme predicts that the prices of food commodities will continue to rise, noting that rates in Lebanon are the highest in the region.

In turn, the head of importers’ syndicate, Hani al-Bohsali, is surprised by the unjustified high prices, however, he believes that it is natural for prices not to drop given that they were originally calculated on the basis of an upper limit for the exchange rate of 7,000 Lebanese pounds per dollar.

He explained that any increase above this limit will result in the inability to sell these goods, adding that it is natural for commodity prices to remain the same, even if the dollar exchange rate is within the range of 7,000 LL.

Bohsali considered that commodity prices could start to decline when the exchange rate falls below 7000. He explained that even this may take several weeks, especially that the merchant will have to sell his old stock which he bought at a high exchange rate.

Meanwhile, citizens search for subsidized commodities included in the food basket that the Central Bank supports at a 3,900 LL exchange rate. But, in most cases, these goods are not available given their limited quantities and the complex requirements.

Bohsali pointed out that the Ministry of Economy did not bind merchants to the subsidized items, so most preferred to buy other products because the food basket stipulates direct distribution to major stores and small shops with a specified profit margin.

Nehme confirms that subsidizing the food basket did not contribute to lowering the prices of commodities, explaining that Consumers’ Lebanon believes that the Ministry’s policy was wrong.

She indicated that the subsidized items reached 10 to 20 percent of consumers at best.

The Minister of Economy in the caretaker government, Raoul Nehme, sent a letter to the Governor of the Central Bank, Riad Salameh, requesting the lifting of subsidies on commodities related to animal and agricultural production, given that it is a waste of public funds.

Nehme tweeted that since the government began subsidizing those commodities, their prices have not decreased, and some even increased.

Bohsali confirmed that there is no indication that food commodities will be scarce, even after the Beirut port explosion, but he pointed out that a large number of goods are still in the port, and this increases the costs for importers, which could lead to an increase in their prices later.



US Inflation Surges 3.3% as Iran War Impact Bites

A person shops at a grocery store as inflation levels lead to a consumer price surge, in New York, New York, USA, 10 April 2026. (EPA)
A person shops at a grocery store as inflation levels lead to a consumer price surge, in New York, New York, USA, 10 April 2026. (EPA)
TT

US Inflation Surges 3.3% as Iran War Impact Bites

A person shops at a grocery store as inflation levels lead to a consumer price surge, in New York, New York, USA, 10 April 2026. (EPA)
A person shops at a grocery store as inflation levels lead to a consumer price surge, in New York, New York, USA, 10 April 2026. (EPA)

Inflation in the United States rose sharply in March, government data showed Wednesday, as higher energy prices due to the war in the Middle East hit Americans hard.

The nationwide sticker shock put pressure on President Donald Trump, who has ordered peace talks with Iran and faces mid-term elections in November.

The rate of inflation rose to 3.3 percent year-on-year in March, the US Bureau of Labor Statistics (BLS). By comparison, this same consumer price index (CPI) rose 2.4 percent year-on-year a month earlier.

Gasoline prices surged by 21.2 percent between February and March -- the largest monthly increase since the government began publishing a related index in 1967, the US Bureau of Labor Statistics (BLS) said.

Excluding volatile energy and food prices, the inflation rate rose 2.6 percent compared to 2.5 a month earlier.

Markets had anticipated the surge, according to the consensus published by MarketWatch.

The United States and Israel began bombing Iran on February 28 and Tehran retaliated by blocking traffic in the Strait of Hormuz, a waterway used to carry a fifth of the world's oil and gas deliveries.

Despite being the world's top producer of crude oil, the United States also felt the pain, as prices at the gas pump shot up.

A gallon (3.78 liters) of regular gasoline currently costs an average of $4.15 in the United States, compared to approximately $3 just before the war.

- More price pain ahead -

The Trump administration -- elected in part on a promise to quash inflation -- maintains that the war's economic disruptions will be temporary.

US Vice President JD Vance said Friday he hoped for a "positive" outcome as he departed Washington for US-Iran peace talks being held in Pakistan this weekend.

But experts predicted more economic pain ahead due to the war in Iran, especially for middle and lower-income households in the United States already squeezed by rising energy and airfare prices.

Heather Long, chief economist at Navy Federal Credit Union, said that inflation soared in March to the highest level in almost two years.

"This is only the beginning. Food prices, travel and shipping costs are all going up in April and will exacerbate the pain," she said.

"March CPI was as expected, so no surprises. But there is a huge increase in fuel prices, boosting inflation" Christopher Low of FHN Financial told AFP.

"And we got the news last night that the ceasefire is not being honored by either side, apparently," he said. "There's still very little traffic through the Strait of Hormuz."

When Trump returned to the White House in January 2025, inflation was falling, compared to a peak in the spring of 2022.

The war in Ukraine, which had started a few months earlier, had driven prices at the pump even higher than they are today.

The CPI index was rising by 2.3 percent year-over-year in April 2025 -- coinciding with the US president's announcement of a sharp increase in tariffs on imported goods.

Inflation started to creep up, though Washington refused to acknowledge this as a consequence of the tariff war.

Price growth slowed again late last year, largely thanks to gasoline prices, relatively moderate at the time.

During the Federal Reserve's most recent meeting in mid-March, Chairman Jerome Powell explained that the war risked delaying efforts to bring inflation under control in the United States.

The US central bank's target for inflation is two percent -- an objective it has not met in five years due to a succession of shocks to the economy: the Covid-19 pandemic, the war in Ukraine, and tariffs.


EU, US Reportedly Near Critical Minerals Deal to Combat Chinese Control

FILE PHOTO: A block with the symbol, atomic number and mass number of Dysprosium (Dy), a heavy rare earth, in this illustration taken January 21, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: A block with the symbol, atomic number and mass number of Dysprosium (Dy), a heavy rare earth, in this illustration taken January 21, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
TT

EU, US Reportedly Near Critical Minerals Deal to Combat Chinese Control

FILE PHOTO: A block with the symbol, atomic number and mass number of Dysprosium (Dy), a heavy rare earth, in this illustration taken January 21, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: A block with the symbol, atomic number and mass number of Dysprosium (Dy), a heavy rare earth, in this illustration taken January 21, 2026. REUTERS/Dado Ruvic/Illustration/File Photo

The European Union and Washington are closing in on an agreement to coordinate on producing and securing critical minerals, Bloomberg News reported on Friday.

The potential deal would include incentives such as minimum price guarantees that could favor non-Chinese suppliers, the report said, citing an "action plan".

The EU and US would also ⁠cooperate on standards, investments ⁠and joint projects, along with increased coordination on any supply disruptions by countries like China, the report added.

The European Commission declined to comment on the report. The office of the ⁠US Trade Representative did not immediately respond to Reuters' requests for comment.

EU trade commissioner Maros Sefcovic said in March he had a "very positive" meeting with US Trade Representative Jamieson Greer on the sidelines of a World Trade Organization ministerial meeting in Cameroon, where the two sides agreed to further advance work on ⁠critical ⁠minerals and also discussed tariffs.

The EU-US deal would cover “critical minerals along the entire value chain and life-cycle management, including exploration, extraction, processing, refining, recycling and recovery,” Bloomberg reported, citing a non-binding memorandum of understanding.

The US has been scrambling to get access to critical mineral reserves, especially rare earth supply chains currently dominated by Chinese players.


Gold Set for Third Weekly Gain as US Rate Outlook Offsets Dollar Strength

FILE PHOTO: Customers crowd around a jewelry showroom during Akshaya Tritiya, a major gold-buying festival, in Kochi, India April 28, 2017. REUTERS/Sivaram V/File Photo
FILE PHOTO: Customers crowd around a jewelry showroom during Akshaya Tritiya, a major gold-buying festival, in Kochi, India April 28, 2017. REUTERS/Sivaram V/File Photo
TT

Gold Set for Third Weekly Gain as US Rate Outlook Offsets Dollar Strength

FILE PHOTO: Customers crowd around a jewelry showroom during Akshaya Tritiya, a major gold-buying festival, in Kochi, India April 28, 2017. REUTERS/Sivaram V/File Photo
FILE PHOTO: Customers crowd around a jewelry showroom during Akshaya Tritiya, a major gold-buying festival, in Kochi, India April 28, 2017. REUTERS/Sivaram V/File Photo

Gold steadied on Friday as US-Iran ceasefire uncertainty lingered, but the metal stayed on course for a third consecutive weekly climb as investors priced in earlier and deeper US rate cuts, supporting non-yielding bullion.

Spot gold held its ground at $4,764.54 per ounce by 0532 GMT. The metal, however, has gained 1.8% so far this week.

US gold futures for June delivery fell 0.6% to $4,787.80.

The ‌dollar index strengthened, ‌making greenback-priced bullion more expensive for holders of other currencies, Reuters said.

"There's ‌a ⁠lack of clarity ⁠about the way that the ceasefire is evolving in the Middle East and what that means to energy markets... so we're in sort of a little bit of a holding pattern (with gold) going into the final session of the week," said Kyle Rodda, senior financial market analyst at Capital.com.

Spot gold has fallen about 10% since the US-Israel conflict with Iran ⁠erupted on February 28, with elevated energy prices sparking ‌inflation concerns and the prospect of ‌higher US interest rates.

The fragile two-week ceasefire between the US and Iran showed further ‌strain on Friday, as Washington accused Tehran of breaching promises on ‌the Strait of Hormuz.

Brent crude, however, has slid more than 11% this week on optimism that the ceasefire could reopen the Strait of Hormuz, through which about 20% of the world's oil and liquefied natural gas passes.

"If things break down, (gold) ‌could end up back in mid-$4,000's pretty quickly. But if the ceasefire holds and the peace deal starts ⁠to look more ⁠likely, then we could push through $5,000," Rodda added.

On the data front, the US Personal Consumption Expenditures index, the Federal Reserve's preferred inflation gauge, advanced 2.8% in the 12 months through February, in line with estimates, and likely rose further in March.

Investors are now looking out for March's US Consumer Price Index data, due later in the day, for further clues on Fed's monetary policy direction.

Markets are pricing in a 31% chance for a US rate cut of at least 25 basis points at the Fed's December meeting, according to CME's FedWatch Tool, up from 20% in the prior session.

Among other metals, spot silver rose 1.3% to $76.03 per ounce, platinum lost 2% to $2,061.10, and palladium fell 0.2% to $1,553.92.