Israel: Price of flour rises by 40 percent

Tel Aviv / IL. (wib) Flour prices are rising in Israel by 35 to 40 percent. Flour mills warned the bakeries about the hike during the last two weeks. The sudden jerk in prices results from spiking flour prices in world markets, by about 30 percent in the last month, while parallel the US Dollar has rebounded against the Shekel. Wheat prices jumped to a twelve-year high because grain inventories around the world shrank, and on news that harvest delays are expected in the United States – the world´s largest wheat exporter. Also, growing demand for wheat in China as the economy there booms has added pressure on prices. The bakeries have advised the Industry and Trade Ministry that they cannot continue to produce price-controlled bread if they do not receive immediate approval to raise these prices by at least eight percent. The types of bread under price supervision include plain white bread, plain brown bread («lehem ahid») and regular «challah». Trade Minister Eli Yishai is expected to hold an emergency meeting in his office today. The ministry officials realize that bread prices must rise, the question is by how much. Bakery owners hope that Yishai´s political social-welfare agenda will not prevent him from approving the price increases. They claim to have enough flour to bake bread only for a few days. The flour mills threatened the bakeries that any bakery that does not agree to the new prices will have its flour supplies cutted off, Yohanan Aharonson, the head of the Bakers Association, told in a press release. On the world market only in June wheat prices rose from 180 to 240 USD. Aharonson: «The increase in flour prices will bankrupt the bakeries. They must receive a significant price rise in supervised bread. Otherwise they will not produce it». According to Aharonson other bakery products today subsidize supervised bread by about 30 percent.

Addition: «Bread shortage hits the country» Jerusalem Post reports on July 05. Major supermarkets and grocery stores across the country ran short of price-controlled bread, as bakeries stopped producing low-priced breads in protest of the refusal by the Minister of Industry, Trade and Labor to raise bread prices …
bakenet:eu