Cheese and Milk Prices to Rise by 5% due to Economic Crunch
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On Sunday, the Israeli Dairy Board gave its approval for a 4.95% raise in the price of milk, along with other price-regulated dairy products like butter and cheese.
This is the latest blow for consumers in Israel who are already dealing with the rise in the price of goods.
A compromise
According to reports, the board had initially been thinking of a hike of 14%, but the Finance Ministry, the dairy board and Agricultural Ministry had conducted negotiations and finally decided on a rise of 4.95%.
Once the price of milk is increased, it will be frozen at this rate until March next year, after which it will revert back to the original price automatically.
However, it is possible that the milk price may be increased in the future. The inflation levels in Israel have risen at half the rate as compared to the rest of the developing world.
Nonetheless, there has been an increase in prices in almost every consumer category and people in Israel have felt the pinch.
In July, the inflation in Israel had reached 5.2% year on year, which is the highest number seen in decades.
But, it was still lower than the 8.9% inflation rate recorded in the United States and the 9.6% OECD average for May.
Inflation in Israel
The consumer price index (CPI) in Israel had climbed by 1.1% unexpectedly in the previous month, while the annual increase as compared to last year had stood at 5.2%.
As per the Central Bureau of Statistics, this is the fastest yearly rate seen in 14 years. Prices of dairy products are considered a sensitive issue in Israel.
There have been reactions that have transformed into huge demonstrations and protests against the high cost of living.
There was a cottage cheese protest back in 2011, which had seen supermarkets reduce their dairy prices and policy reforms had also been introduced for bringing down consumer prices.
There was another mass protest three years later that encouraged Israelis to go abroad. This was after consumers noted that the price of Milky chocolate pudding treat was lower abroad.
Cost of living
Elections are scheduled in Israel for November 1st and the rising cost of living is on the agenda. The Israel Democracy Institute (IDI) recently conducted a survey on the matter.
The results disclosed that 44% of the people would make their decision about whom to vote for in the elections based on the party’s plan for addressing the cost of living problems.
There was an 8.5% rise in the cost of fresh fruit, while a 3.3% gain was seen in transportation costs. The CPI showed that there was also a 1.2% rise in entertainment and culture costs.
Footwear and clothing may have seen their prices drop by 4%, but there was a rise in goods like cosmetics, toiletries and school bags.
The CPI does not keep track of housing prices, but those also recorded a sharp rise. The average price of an apartment has increased by NIS 80,000 in the second quarter.
