Price of rice to rise as well: The prices of rice and cooking oil will be rising sharply in the days to come. On Wednesday the Agriculture Ministry warned that eggs, chicken and dairy prices will be rising by as much as 17% because of spiking animal feed costs. How much rice and oil could rise remains to be seen, it says. All it can state now for sure is that an increase is inevitable. Cotton and sugar crops in North America aren't affected, the ministry observed, because they aren’t grown in the drought-stricken corn belt of the Midwest, which is having its driest season since 1956. But it isn't only America that’s in trouble: drought is also afflicting Europe, Russia, Ukraine, China and Pakistan, says the ministry, and in India the monsoon is feeble. The upshot, it says, is that grain prices everywhere are shooting up.
Gasoline price to rise too: Just as the cost of chicken, eggs, and rice are rising, so too is the cost of going to get them. Brace for an increase in gasoline prices come September, say economists. For one thing, the government is hiking VAT from 16% to 17%, which automatically adds to the price at the pump. For another, there's the appreciation of the U.S. dollar against the shekel. And yet another, there are those tensions in the Middle East, and the price of gasoline in Israel is necessarily tied to the price of oil. Currently, 96-octane retails for NIS 7.70 per liter (self-service).
El Al cuts its losses: El Al Israel Airlines cut its year over year loss by nearly 70%, the airline said yesterday, reporting a $6.2 million loss for the second quarter of2012, compared with a loss of $19.7 million in the corresponding quarter the year before and a loss of $23.5 million in the first quarter. Cutting wage costs helped it widen its gross margin to 15.1% of turnover, from 11.4%, the airline said. Gross profit came to $77.9 million, up from $60.3 million in the corresponding period of the year before. Revenues fell to $515 million, from $530 million in the second quarter of 2011, a drop of 3%.
Beiga Shochat quits Mizrahi board: Avraham "Beiga" Shochat yesterday quit his job as director of the Bank Mizrahi-Tefahot board of directors over differences of opinion with chief executive Eli Yones. Tensions between Shochat, a former finance minister, and Yones have been building for some time. The latest nexus of nastiness was the bank's intention to give its veeps a raise, which Shochat opposed. Then the bank's controlling shareholder Eyal Ofer advised Shochat, through a third party, that he wouldn't nominate him for another term at the next shareholders assembly in a month's time. Some sources claim the real issue is Shochat's refusal to step down from the board of directors at Carasso Motors, importer of Renault, which constrains the bank's ability to deal with that company for fear of conflicts of interest.
Psagot downgrades Israel Chemicals: Following ICL's second-quarter statement, which by and large met analyst forecasts, Psagot downgraded the stock from Buy to Hold. The company did perfectly well in the quarter, delivering results that were "broadly in line with consensus", as Merrill Lynch said. But Psagot analyst Ilanit Sherf stresses the challenging business environment, even if the third quarter should be a good one for fertilizer suppliers like ICL. No less to the point, the company's stock has rebounded strongly, wiping out its trading discount to fair value. Her 12-month price target for ICL is NIS 50. Merrill Lynch maintained its Neutral recommendation for the stock and target of NIS 47.
With reporting by Amiram Cohen, Sivan Aizescu and Itai Trilnick
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