May 2, 2011

Falling Dollar, Higher Fuel Prices Wreak Havoc for Israeli Food Exporters

Tel Aviv… Prices of Israeli food products sold in the US are heading upward, food sources in Israel told KosherToday. The Israelis say that the prices will reflect sharply increased costs of many ingredients as well as shipping, much of it a reflection of soaring fuel prices. But Israeli products whose pricing is most often based on the dollar are also adjusting prices because of a plunging dollar in Israel. According to Globes, Israel’s leading business publication, the shekel recently gained ground against the dollar. The dollar has also been losing ground against the major world currencies. The shekel was stronger in the wake of US Federal Reserve System chairman Ben Bernanke's decision last week to leave the US interest rate unchanged at its historic low of 0-0.25%. Israelis sources say that the adjustment in the prices should have already been in place before Passover but the prices of most items were already locked in months before, forcing the Israelis “to eat the price difference,” according to a leading importer. Despite the increases, Israeli food exports to the US are expected to continue their climb to new records, reflecting a better product mix and more aggressive marketing.