Tomato prices are still climbing. Tomatoes were sold today in the wholesale market for NIS 11.50-12 a kilo, 30% higher than the NIS 8.80-9.50 wholesale price a week ago. No VAT is charged on fruits and vegetables.
The trend in tomato prices has been upwards for the past two months, with the wholesale price shooting up 140%-187% just in the past month. Prices have risen 215-228%, compared with the NIS 3.50-3.80 price two months ago.
The persistent increase in tomato prices highlights the severe criticism directed at the Ministry of Agriculture, which did not take timely steps to rein in the price of one of the best-selling vegetables in Israel.
The Ministry of Agriculture estimates the shortage of tomatoes at a minimum of 6,000 tons, with monthly consumption totaling 15,000-18,000 tons a month, adding that the shortage may amount to as much as 50% of consumption.
Factors in the shortage include the exceptional heat wave in August and a virus that attacked agricultural crops and reduced production.
The Ministries of Agriculture and Finance yesterday agreed on a number of measures involving tomato imports, which, however, are unlikely to affect tomato prices in the near future, primarily because of the timing. Importing tomatoes takes at least several days, while the decision was made on Tuesday, and it is clear that it will be very difficult to import tomatoes three days before the weekend when the weekend is following by the second Sukkot holiday on Sunday evening and Monday. These measures, however, may indeed cause a drop in tomato prices after the Sukkot holiday.
The first measure, which was announced even before Rosh Hashanah (the Jewish New Year), is opening the market to tomato imports without customs duties for a few weeks, while imposing a weekly quota. The Ministry of Agriculture explains that the weekly quota is designed to protect local farmers and preventing a greater volume of imports that will increase the risk incurred by importers.
The second measure is a "significant" easing of the tests of produce conducted at the port by the Ministries of Agriculture and Health in order to expedite the release of the produce. The ministries did not state which tests would be eased.
At the same time, allowing imports of tomatoes with stems will be considered. Such imports are currently banned, due to the health risk, and are not needed, because the market is currently based on domestic crops. Importing tomatoes with stems will extend the shelf life of imported tomatoes on the one hand, and lower the overseas purchase price on the other, because it will save on harvesting labor.
At the same time, the Ministries of Agriculture and Finance are currently on vacation for Sukkot, and it is not clear when this matter can be properly assessed, and when conclusions will be drawn. The Ministries of Agriculture and Finance will consider the price level and the need for continuing these measures again next week.
Published by Globes [online], Israel business news - www.globes-online.com - on September 30, 2015
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