Days after a Libyan central bank official said that letters of credit (L/Cs) are beginning to flow again in the country it has emerged that they are certainly not yet available for all types of imports.

Particular problems have been reported with L/Cs for much-needed grain imports.

Cash crisis

Libya is a big importer of foodstuffs, but sellers are unsure as to who is running the tenders for grain under the new administration.

The north African country has been trying to buy grain on the international market over recent weeks, but had to cancel a tender for 100,000 tonnes of wheat in October because willing sellers could not be found.

Reluctant sellers

Sellers have proved reluctant to do business with Libya because they are unsure as to the true identity of their trading counterpart.

One trader reported that L/Cs are not being confirmed and that the major trading houses are unwilling to do business except on a cash-up-front basis.

Earlier this month, the deputy director of research and statistics at the central bank said that L/Cs for imports into Libya are beginning to flow once more (DC World News, 4 November 2011).

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.