Despite the current weakness of Israel’s currency, Befresh Europe has been getting good prices for their fruits and thus managed to make some profit, but also that the circumstances in a number of markets have changed.
In the grapefruit market, for example, “you see a lot of demand coming from the East; from China, Japan, Korea or Vietnam, and America has also become an attractive destination. Meanwhile, the European division is becoming less and less important, even though the European market has also been performing better than last year," said Oron Ziv.
When looking specifically at China, Mr Ziv affirms that, while there are opportunities, as this market has recently started demanding more grapefruit, the country is still a big question mark, mostly due to its strict regulations and “the need to register your plantations way in advance and pass all kinds of tests.” Also, Mr Ziv is concerned about what will happen when many exporters have already gained access, since “that could eventually result in a price war.”
The marketing has, in fact, already become tougher over the last year for products like Ori clementines because of competition from Spain, and “we have also been trying to develop some new markets for it, like North America, Japan and other eastern countries.” The main issue is that “with the prices we have been getting over the last two years, you need a certain production in order to make a profit. With a low yield, you won’t be able to survive,” he assures.
“With lemons (which go mostly to the domestic market) we might also need to find export markets to bring a balance to the supply and demand,” although, he also explains, it is impossible to compete with countries like Turkey, which have cheaper water and much lower production costs. There are other aspects at work, such as the Russian veto, whose lifting “would reduce some pressure from Europe, leaving a little more space for us, but it is very difficult to predict what will happen.”
As for minneolas, Mr Ziv states that they remain a niche product, with demand coming mostly from South America, the Netherlands, Belgium or France, and although still a small product, “it has certainly become a more interesting item than it used to be five or six years ago.”
In any case, one of the best performing products over the last three or four years was avocados, which has motivated many producers to plant them as a replacement for less profitable crops. “The demand for avocado worldwide is booming and, generally speaking, avocado growers are very happy. If there are two nice items in the global fruit and vegetable industry, one is avocados and the second is dates. Depending on the size and variety, you can make a nice profit out of them,” he assures.
In BeFresh Europe’s case, the avocado production this year is expected to reach 100 thousand tonnes, “with 50% intended for export and the other 50% staying here for local consumption. And with all the new plantations of recent years, the production could grow to 150 thousand tonnes.” The big question in the industry is whether the market will go more for green skin varieties or for the Hass. “At the moment (depending on the region), the ratio in the plantations is 60% for the Hass and 40% for the rest,” he affirms.
Other products marketed by the firm include mangoes, whose season had a normal development, without any surprises, and pomegranates, for which Israel has both an early and a late season. “The early variety (which is harvested in July) has a nice niche, as it comes to an empty market, but later other countries, like Egypt, Turkey or Morocco, also arrive and the European market becomes oversupplied,” he explains. This makes it necessary to sign programs with retailers willing to pay extra for good, safe fruit. “There is also an attempt to develop some new niches in Singapore, Honk Kong or Canada,” but eventually the situation ends up being the same. You need programs.
All in all, Mr Ziv states that one of the defining aspects of the fruit and vegetable sector is that you are handed new cards every year, so “you are forced to adapt constantly to new situations.” This is one of the reasons for his scepticism about the plans from some retailers to pursue dealing with the growers directly, without intermediaries, as it remains a very complex process and there’s a lot of money and knowledge involved.
