Israeli Flour Mills to Increase Prices by Up to 15%

Flour mills in Israel are preparing to raise prices by 10% to 15%, a move expected to impact the cost of bread, cakes, and pastries. Bakery producers have warned that they may struggle to absorb the increased production expenses. According to a report in Yedioth Ahronoth, some mills will implement these price hikes starting November 1st, with others following in December, depending on the type of flour and contract terms. Bar-Raf, a major Israeli mill, informed its clients of an 11% price increase effective early November. The company cited a sharp rise in global wheat prices and supply chain disruptions stemming from the Russia-Ukraine war and attacks on Black Sea ports and vessels. Bar-Raf noted that switching to wheat imports from Western European countries, at prices 35% to 40% higher than several months ago, has escalated raw material, transportation, and production costs. Hadar Golombek, General Manager of Shtibel-Dagan, stated that canceling wheat supply orders from Russia, a primary source for Israel over the past two years, forced the company to import from Poland at higher prices amidst global shortages and increased sea freight costs. Bakery producers cautioned that they might not be able to bear the full increase, potentially leading them to raise consumer prices for their products, though a final percentage has not yet been determined. These developments occur amid mounting pressure on global wheat markets due to security and climate disruptions, as well as transportation and supply complexities, raising concerns about the pass-through of rising essential material costs to food prices and increased consumer living expenses.