Unclear whether Israeli peppers will see boost in Russia

Unclear whether Israeli peppers will see boost in Russia

The Russian ban on European goods has opened up a potential opportunity for Israeli pepper growers, who are not subject to Russia’s ban. But with the emerging dominance of Spanish peppers in the European market, many Israeli exporters have been focusing on the Russian market for years. With significant quantities of Israeli peppers already finding their way to Russia, it’s not clear if the recent ban on European goods will lead to an increased amount of peppers arriving in Russia from Israel.

“There are peppers right now in Israel, but they’re for the domestic market,” said Niva Ben Zion of Avniv. “In terms of whether there is enough to export to Russia, I’d say there are some peppers, but nothing like the quantities we’re familiar with during winter.” If Israeli exporters had known that the Russian market would not be open to European exporters right now, they might have planned for more volume available for export. But as no one could have foreseen the current situation, Israeli exporters can’t pounce on the present market.

As for the medium term, Niva Ben Zion is not sure the Russian market will become significantly more attractive for Israeli shippers, as that market has already become an important one for exporters.

“In general, we will keep going to the Russian market, as we have done for many years,” said Niva Ben Zion. “Everyone in Europe has preferred Spanish peppers for some time because they don’t have to pay duty on them, there are fewer transportation costs and there are fewer quality issues. We’ve found ourselves relying more on the Russian market, so I don’t see such a big change. There will be fewer peppers going to Russia from Spain, but I don’t know how much was going to Russia from Spain before.”

Lastly, in order for Israeli suppliers to take advantage of the situation, the prices in Russia would have to be sufficiently steep to justify foregoing the domestic market. Because the export season has yet to get into full swing, it’s not clear prices will be high enough to justify an increase over what already is typically sent to Russia.

“Europeans can still send mixed trucks with produce from countries not in the European Union to Russia, so those mixed trucks, which carry different kinds of produce from different countries, might now need more Israeli peppers instead of Spanish peppers,” said Niva Ben Zion. “But, in my estimation, I don’t think much will change.”

Publication date: 9/4/2014