Israel's carrot exports to Russia are facing difficulties amid the Russia-Ukraine conflict. Logistics and payment are the actual setbacks for export. These difficulties caused significant problems for farmers and traders. Without a quick alternative to export, almost 50,000 mt of fresh vegetables, such as carrots, are rotting in storage and are at risk of being destroyed.
Source: TradeMap
Israel represents a 2.5% share in world carrot exports, with a value of USD 35.3M in MY 2020. The main market so far has been Russia, with a market share of as much as 53% and a value of USD 18.68M. However, since the beginning of the Russia-Ukraine conflict, it has become increasingly difficult to export carrots to both Russia and Ukraine. Reduced payment options are also a problem, where only some banks provide these services. Also, the devaluation of the Ruble does not help exporters. The devaluation caused reduced supply at the beginning of the year, while currently, the Ruble has stabilized, and traders have agreed to pay in USD.
On the other hand, payments in USD affected demand, which fell by more than half compared to the previous period. Added on top are logistical problems, which makes the situation more complicated. The port of Odesa is closed, Russian ports are receiving goods, but shipping companies are reducing the number of ships. As a result, deliveries are irregular, and it becomes challenging to plan the supply chain. All these factors were reflected in the price of carrots, which rose on the Russian market from USD 0.25 /kg in March to USD 0.68/kg in April, a 63.23% MoM increase.
The current outcome for manufacturers is uncertain. Since storage capacities are small, and not intended for larger quantities, part of the yield will be destroyed if no alternative market is found. England and Poland have been Israel's trading partners in the past but cannot consume the quantities. The Russian market remains the dominant destination of Israeli carrots for now. Some farmers decide to ship carrots, believing that everything is better than destroying goods.