Prime Minister Yair Lapid and Economy Minister Orna Barbivai agreed on Monday to limit planned price hikes for bread and implement a controlled gradual increase instead.
According to the agreement, the price of sliced bread will increase by 5.5% instead of 11%, the price of challah bread will rise by 8% instead of 21%, and the price of white bread will increase by 5% instead of 36%.
The Finance Ministry's pricing committee is expected to introduce further hikes to the prices of sliced bread and challah in December while the price of white bread would jump by 21% for a three-month period.
Ministers also agreed to do away with price control by April 2023. Lapid asked ministers to provide a suitable financing plan to tackle rising food costs.
The pricing committee noted the main reason behind bread price increases is skyrocketing wheat prices on the international market as a result of the war in Ukraine.
Economy Minister Barbivai appealed to food chains in a request to temporarily postpone price increases for regulated bread, with some agreeing to put a cap on prices for the next two weeks despite the pricing committee's decision.
Meanwhile, Israel's two largest bakeries Angel and Berman petitioned the High Court of Justice last week against Barbivai's intention to leave price control in place, contrary to the recommendation of the pricing committee.