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Cost of living: Here's proof that food importers lie to our faces – voila! money

2023-05-23T05:29:25.862Z

Highlights: ZIM, a global shipping and ocean freight company, yesterday released its business results, on a consolidated basis, for the first quarter of 2023. ZIM is recording a small loss, in terms of a giant company of its kind, of $58 million (after earning about $2022.1 billion in the corresponding quarter of 7), almost pennies in the volume of its business. Unintentionally, the company exposed in its quarterly report one of the biggest lies surrounding the rise in the cost of living.


What does the cost of transporting a container have to do with everyone's pocket – and even with the Economy Minister's plan to combat the cost of living?


Does every visit to the supermarket hurt more in your pocket? Now it will also hurt in the heart, when we understand what kind of turn is being made on the Israeli consumer (Photo: ShutterStock)

ZIM, a global shipping and ocean freight company, yesterday released its business results, on a consolidated basis, for the first quarter of 2023.

The report itself is not surprising: ZIM is recording a small loss, in terms of a giant company of its kind, of $58 million (after earning about $2022.1 billion in the corresponding quarter of 7), almost pennies in the volume of its business, certainly when anyone who bought the company's stock when it went public in New York two and a half years ago knows that he made the deal of his life.

Therefore, we would not dwell on the report too much if it did not contain a clause proving that one of the main reasons for the increase in food prices in Israel is nothing more than nonsense:

the average shipping price per container (TEU) in the first quarter was $1,390, a decrease of 64% from the same period last year.

Containers on a ZIM ship. Unintentionally, the company exposed in its quarterly report one of the biggest lies surrounding the rise in the cost of living (Photo: PR)

This figure reflects the magnitude of the rotation that food manufacturers, especially food importers, are making on us (the former import only some of the raw materials). How many times have you heard of the spike in transportation costs as a reason, which in retrospect is nothing more than an excuse, to raise (sorry: "update" in euphemism)?

It should be said immediately: there was a sharp increase in shipping prices, it began during the COVID-2 period and peaked with the demand for goods created by the gradual removal of restrictions due to the pandemic. But then came a decline – not even a small one. Have you ever heard a manufacturer or importer ask the chains to lower the price of their products just because sea freight fees have dropped?

Moreover, one of the causes of the increase in prices is the depreciation of the shekel against the dollar (a total of about <> percent in the past five months, worrisome, but much lower than any upward "revision" of the price derived from it). In previous years, the shekel had done well against the dollar and other currencies. Have you ever heard a business source announce: "To our customers, due to the strengthening of the shekel, we have lowered the prices of the brands we import to Israel?" Never, right?

When importers are asked such difficult questions, they mumble something about the fact that in practice the price increases should have been earlier and sharper - and therefore the above clauses allowed them to "absorb" (a word they love about) the increases for X months or years, until, as stated, they were "forced" to raise prices. This argument can also be summed up in one word: nonsense.

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Nir Barkat, Minister of Economy. It's not certain that his move will succeed, but when you look at ZIM's reports, we want to at least see the big importers squirming (Photo: Kobi Gideon / GPO)

Yesterday, we rolled over the move that will require 15 large food manufacturers and importers to disclose their profits. We argued – and we still hold this argument – that this is not a move that will bring about a change of direction in the war on the cost of living. But one thing must still be said to Nir Barkat, Minister of Economy: He is at least trying.

His initiative may not deduct a shekel from our shopping basket, but it will make them squirm, maybe even admit that behind their price "updates" lies the simple desire to earn more and more. This is not a crime where the market is free, so only the consumer public will judge whether it is legitimate will or greed – because in a free market the consumer is the final arbiter.

Eli Glickman, President and CEO of ZIM. We rely on him, on food importers – a little less (Photo: RAPOPORT private news productions)

And a word about Zim, whose small section of its reports reveals the truth about the distorted mechanism of reasoning following price increases in Israel.

Eli Glickman, ZIM's highly successful president and CEO, summed up the report by saying, "ZIM's first quarter results reflected the significant decline in freight fees."

He added: "The proactive steps we have taken during the market boom put us in an improved position to address these challenges, and we believe our differentiating strategy will, ultimately, bring sustainable value to our shareholders over the long term."

We believe Glickman, he has receipts for navigating ZIM's merchant fleet from strength to strength, it's just the people who raise our food prices and we believe a little less with each passing day.

  • money
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Tags

  • ZIM
  • Cost of Living
  • Nir Bareket

Source: walla

All business articles on 2023-05-23

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