Israel Braces for Price Hikes on Flour, Bread, and Gasoline
Translated & summarized from Mignews by baba
Israel anticipates price increases for flour, bread, and gasoline starting in November. Flour producers like "Bar-Rav" and "Tahanot Kemah Miftz" are raising prices by 11% and 14% respectively, citing supply chain issues from the Ukraine war and increased shipping costs. Bakers warn these increases will affect consumer prices. Egg prices will rise 2.1% on November 1, and fuel costs may increase if tax breaks expire.
The story in 5 lines · by baba
- Flour prices in Israel to rise by 11-14% starting November due to supply chain issues.
- Bakers warn that rising flour costs will lead to higher prices for bread and pastries.
- Regulated egg prices will increase by 2.1% on November 1.
- Gasoline prices may rise significantly if government tax breaks on fuel expire.
- Flour companies cite Ukraine war and shipping disruptions for increased costs.
Israel is anticipating a rise in prices for several food products and fuel starting in November. Flour producers have already informed their clients of impending price increases, with the baking industry warning that higher costs will likely impact the final price of bread and baked goods. "Bar-Rav" announced an 11% price hike for flour, while "Tahanot Kemah Miftz" will increase prices by 14%. Hadar Golombek, head of "Shtibel-Dagan," is discussing a 10-15% price increase with customers, with changes expected in November and December depending on contract terms and wheat varieties. These increases currently apply to flour purchased by bakeries and food manufacturers, not for home consumers.
Bakers and pastry producers state they cannot fully absorb the rising costs and will need to pass some of the expenses onto consumers. Any price increases for state-regulated bread varieties will require approval from the Ministry of Economy. Flour companies attribute the price surge to the war in Ukraine, disruptions in Black Sea grain shipments, and increased transportation costs. "Tahanot Kemah Miftz" reported that four grain shipments to Israel were canceled in the past two months, forcing them to purchase wheat at a significantly higher cost, $80-$90 per ton more.
While international wheat prices show mixed trends, with a 6.3% rise globally in September according to the FAO, European wheat futures saw a 4% decrease in the week ending October 23. These figures make it difficult to directly assess the justification for the Israeli price increases, as actual purchase costs depend on contracts, logistics, and grain origin.
Additionally, regulated egg prices will increase by 2.1% on November 1, a pre-approved adjustment due to production and trade costs. A potential further price hike could result from the expiration of fuel tax breaks. If the government does not extend the excise tax reductions, which have lowered fuel costs by one shekel per liter, motorists could face higher prices in November. Reports suggest gasoline could reach nine shekels per liter. The final prices for fuel, bread, and pastries will depend on government decisions and negotiations between producers and retailers.
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