Many Israeli carrot growers expanded their acreage this season after having much success with carrot sales the previous season. But that additional production has further depressed a sluggish carrot market in Europe. While there is still time for movement to pick up, shippers are bracing for an export season that will bring returns far below what was expected.
“There's really no demand in Europe because there are plenty of carrots there already from local production,” said Oron Ziv of Befresh Europe. “It's still a bit to early to panic, but the situation doesn't look good.” Russia is the largest market for Israeli carrots, but buyers there aren't taking nearly as much volume as they have in the past. While it's not odd for Russian chain stores to take about 60 or 80 containers per week during a normal season, it's already been three weeks since the largest chain store in the country stopped ordering carrots.
“The only market that is moving is North America – in the United States and Canada,” said Oron. “The world is smaller, so Israeli carrots are now going to North America, but carrots from remote areas can now go anywhere. Egypt is now stepping into the carrot business, and Spain will soon start to ship. Russia has to buy fruits and vegetables, but if they can find new sources that are cheaper, then that will affect Israel.” He added that the falling value of Russian currency has significantly affected profits. That's been the case for more than a year now, but because margins for exporters are so thin, any increase in the value of the currency will certainly be welcome.
One bright spot has been the way organic carrots have sold. European consumers can't get enough of the organic product that Israel ships, but the problem is that organic production hasn't increased to match strong demand. Part of that has to do with the crop rotation that organic carrot production in Israel requires, which has limited the amount of additional acreage growers can add.
In contrast with the carrot market, the citrus market has been steady for Israel's grower-shippers. The Orri mandarin has sold well, and the market for grapefruit could improve in the next few weeks.
“You will see more demand for our grapefruit because the Northern Hemisphere is finishing up,” said Oron. “Florida is out, Spain and Turkey are finishing, and South Africans are suffering from a heat wave. There are not too many big sizes available, but there will be opportunities for Israeli exporters during the last part of the season. Prices have already gone up, but I hope prices will go up even further in the next three or five weeks.”
