Israel Faces Potential 15% Flour Price Hike Amid Supply Chain Woes
Translated & summarized from Alarab by baba
Israeli flour mills are set to raise prices by 10% to 15% starting November 1, with further increases expected in December. This is attributed to soaring global wheat prices and disrupted supply chains due to the Russia-Ukraine war. The price hikes are anticipated to increase the cost of bread and baked goods for consumers, as producers warn of their inability to absorb all the additional expenses.
The story in 6 lines · by baba
- Israeli flour mills plan price increases of 10% to 15% starting November 1.
- The price hikes are driven by rising global wheat costs and supply chain issues.
- The Russia-Ukraine war and Black Sea attacks are cited as major factors.
- Bakers warn that the increased costs will likely lead to higher prices for bread and pastries.
- Consumers may face increased costs for essential baked goods.
- Imported wheat from Europe is now 35-40% more expensive than before.
Flour mills in Israel are preparing to increase prices by 10% to 15%, a move expected to drive up the cost of bread, cakes, and pastries. Producers have warned that they may struggle to absorb rising production expenses.
According to a report in "Yedioth Ahronoth's" economic section, some mills will implement the price hike starting November 1, with others to follow in December, depending on the type of flour and contract terms. The mill "Bar-Raf" announced an 11% increase to its customers effective early November, citing a sharp rise in global wheat prices and supply chain disruptions linked to the Russia-Ukraine war and attacks on Black Sea ports and vessels.
Bar-Raf explained that switching to wheat imports from Western European countries, at prices 35% to 40% higher than a few months ago, has increased raw material, transportation, and production costs. Hadar Golombek, General Manager of Steibel-Dagan, stated that the cancellation of supply orders from Russia, a primary source of imported wheat for Israel, forced the company to import from Poland at higher prices amid global shortages and increased sea freight costs.
Bakers have cautioned that they may be unable to absorb the full increase, potentially leading them to raise prices for consumers on products like bread, cakes, and pastries, though no final percentage has been set. These developments occur amidst growing pressure on global wheat markets due to security and climate disruptions, as well as transportation and supply complexities, raising concerns about the impact of rising essential material costs on food prices and the cost of living.
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