Bread and Pastries to Rise in Price as Flour Costs Surge

Israeli consumers are bracing for another wave of price increases, with flour costs set to rise by 10%-15% starting November 1st. Several flour mills have already informed their clients of the upcoming hikes, which will directly impact the prices of baked goods like bread, cakes, and pastries.

One bakery owner told Ynet that the significant increase in raw material costs will necessitate price adjustments, stating, "We cannot absorb the full increase." The primary driver behind this surge is the escalating conflict between Russia and Ukraine. Russia is a major wheat supplier to Israel, but Ukrainian attacks on Russian ports and ships in the Black Sea have disrupted supply chains, affecting shipments of wheat and barley destined for Israel.

Bar-Rav mill in Tel Aviv, a major supplier to companies like Assis and Bonjour, has notified its customers of an 11% price increase. The mill explained in a letter that sharp global wheat price increases, largely due to the closure of Black Sea ports, are forcing them to source wheat from Western Europe at significantly higher costs, a 35%-40% jump compared to a few months ago. Additionally, Black Sea suppliers have canceled agreements due to the ongoing events.

This price hike occurs amidst a global wheat price increase driven by drought in Europe, the El Niño phenomenon in Asia, Black Sea tensions, and shipping disruptions. "We are already grinding more expensive wheat after our orders from Russian suppliers were canceled," explained Hadas Golombek, CEO of Shtibel-Dagan, a large industry company. He noted that Ukrainian attacks have damaged ships, forcing them to import wheat from Poland at a higher price. Furthermore, global wheat shortages and increased sea freight rates are contributing factors.

Complicating matters further are halachic disputes among leading kashrut authorities, which limit the approval of wheat shipments from alternative countries. Golombek also pointed out that this year, local Israeli wheat is being used, which is more expensive as its price is pegged to the higher U.S. wheat price. Mills with small stockpiles are being forced to raise prices immediately, with increases of 10%-15% expected to take effect in November and December.