Israel Faces Price Hikes on Essentials, Fuel This November

Several categories of goods in Israel are facing price increases starting in November, with essential products and automotive fuel expected to be particularly affected. Major flour producers have announced hikes of 10-15% in their wholesale prices, signaling potential increases for bread and baked goods. Egg prices are also set to rise, and gasoline could become significantly more expensive if tax breaks are not extended.

Flour manufacturers are informing customers of revised price lists due to rising procurement and transportation costs. Companies like Bar-Rav will increase flour prices by 11%, and Tachanot Kemah Mifratz by 14%. Hadar Golombek, head of Shtibel-Dagan, is also negotiating price increases of 10-15%. These adjustments currently impact industrial food manufacturers and bakeries buying in bulk, while packaged flour for home use remains unchanged for now.

Representatives from the baking industry warn that increased production costs will inevitably lead to higher prices for finished products, with bakeries potentially passing on some of the additional expenses to consumers. However, prices for state-regulated bread will not increase without a decision from the Ministry of Economy.

Flour producers attribute these price revisions to the fallout from the war in Ukraine, disruptions in grain supplies via the Black Sea, and increased international logistics costs. They claim that supply chain issues force them to source raw materials from more expensive alternatives. Tachanot Kemah Mifratz reported issues with four vessels meant to deliver grain over the past two months, leading to an estimated $80-$90 per ton increase in wheat acquisition costs.

Despite these claims, global wheat prices show mixed trends. While the FAO reported a 6.3% increase in international wheat prices in September, December wheat futures on the European Euronext exchange fell by 4% to 234 euros per ton in the week ending October 23rd. This suggests that global market dynamics do not always align with the actual expenses of individual importers, as final purchase costs depend on contract timing, routes, origin, and logistics.

Additionally, regulated egg prices will rise by 2.1% from November 1st due to an automatic recalculation of production and trade expenses. Motorists may also face higher fuel costs if the government does not extend previous excise tax reductions on gasoline, which previously lowered the price by one shekel per liter. A potential scenario includes gasoline prices reaching nine shekels per liter, though a final decision is pending.