Agriculture Ministry: Food prices to rise by up to 17%
According to Agriculture Ministry, Israel is on the verge of a food crisis. By the end of 2012, milk, eggs, chicken, turkey to become 6-17% more expensive
The data were published by the Center for International Agricultural Development Cooperation (CINADCO) of the Agriculture Ministry, taking into account drought conditions and rising commodity prices around the world.
In accordance with impending increases of VAT and subsidized bread prices, it seems that 2013 will be difficult in terms of food costs.
The CINADCO report reviews the rising prices of corn, soy and sorghum, which are key components in animal and human nutrition. Due to droughts in the midwestern US, France, Russia, Ukraine, Kazakhstan and India, most commodities are becoming more expensive.
But not only droughts are to blame. According to economist Eran Shavit, who compiled the report, goods are now more expensive primarily due to speculators playing with commodity market prices.
"There was a 60% commodity price increase within six weeks," Shavit told Ynet. "All parameters indicated that inventories weren’t that scarce. Speculation is all over the market."
Possible scenarios
In light of price increases, including an estimated 25% bump in the cost of grain, the CINADCO analysis postulates that dairy products, eggs and poultry will cost 6-17% more in August.
The report states that "by the end of the year, food prices will be significantly higher than they are today. All the signs of a food crisis are here: Oil prices are around $100 a barrel, and unlike 2008, many countries' (economies) are now slowing down. This is dangerous since many countries don’t have sufficient available resources."
