Israeli bakeries producing price-controlled bread are preparing to request approval from the Economy Ministry for a price increase, following a significant rise in flour costs. Flour mills in Israel have announced price hikes ranging from 10% to 15%, with some changes taking effect as early as November 1 and others in December. The Bar-Rav mill in Tel Aviv, a major supplier to companies like Osem and Bonjour, has already set an 11% increase for next month.
The primary driver behind the price surge is the ongoing Russia-Ukraine war, which has disrupted wheat supplies to Israel. Russian attacks on Black Sea ports have led to canceled orders, forcing mills to seek more expensive alternatives from Poland and Western Europe. Wheat prices from these new sources are now 35% to 40% higher than a few months ago, compounded by increased shipping costs and weather-related shortages.
Local wheat production is also contributing to higher costs, as its price is tied to expensive American wheat imports. Baked goods manufacturers warn that they cannot absorb the full cost increase, meaning consumers will likely face higher prices across the board. However, price-controlled bread presents a unique challenge, as bakeries must await government approval before passing on any cost increases.
For Israeli consumers, this means another essential product could soon become more expensive, affecting everything from supermarket bread to bakery goods. Even those who bake at home may not escape the price hike, as flour prices in stores are also expected to rise.