Israeli Farmers Approach Russian Markets With Caution

December 6, 2015

2 min read

Against the backdrop of the recent outbreak of tension between Russia and Turkey, Israeli farmers face a potential opportunity for expanding their business into the Russian market.

Russia banned Turkish agricultural imports after Turkey shot shown a Russian plane that was flying near Syria’s border with Turkey, and Israel is among the handful of countries with which Russia is looking to replace Turkish imports.

“We have already heard that the Russians are prepared to import our products instead of the Turkish products, which of course would be good for us,” said Rami Sadeh, an Israeli agronomist and farmer from the agricultural community of Ein Yahav, located in Israel’s Negev region.

However, Sadeh told Tazpit Press Service that he was cautiously enthusiastic.

“During last year’s agricultural season, we were very enthusiastic because Putin said he was not going to buy agricultural products from Europe and we thought we were going to make a lot of money by selling more of our products to Russia,” Sadeh said. “What actually happened was that we lost some money because of problems in the Russian market.”

The difficulties in Russia’s financial market were at least somewhat unexpected for many of Israel’s farmers.

“We planned a lot beforehand, but we lost money because the Russian ruble was significantly collapsing to the dollar at the time,” said Sadeh. The Russian ruble had been collapsing largely as a result of economic sanctions imposed on Russia by the US and EU over the conflict in Ukraine.

However, Israeli farmers experienced the acute problem of not receiving actual payment for exports sent to the Russian market. “Specifically, there is a huge problem with the financial market in Russia because no one can give you a guarantee that you will get payment for your product,” explained Sadeh.

“Many of us sent peppers to Russia and never got paid back,” Sadeh continued. “Some of my friends and colleagues never got paid and are still seeking to get their money back.”

Apparently, Israeli farmers like Sadeh have not experienced such problems with Israel’s more traditional trading partners. “In Europe, this never happens as we can be sure that we will get the money,” Sadeh said. “Our buyers in Europe pay after they receive our peppers, tomatoes, and eggplants.  In the US, we also know that we will eventually get the money after sending out our products.”

Sadeh told TPS that he and other Israeli farmers will only be comfortable selling their products in the Russian market when an official arrangement between Israel and Russia will be established to ensure payments from buyers in the Russian market.

“What we want is the Israeli government to be in a position to guarantee that we will be paid,” Sadeh explained. “If there is a bilateral agreement between Israel and Russia in which the Israeli government can secure and guarantee payment for our products, it could be very helpful and we could send the products free of concern. But we don’t have that type of guarantee now.”

Despite the lack of guarantees, Sadeh says he still remains hopeful.

“We are optimistic that if the Russians stop their agricultural relationship with Turkey, we can actually profit from the situation,” Sadeh said to TPS. “While we are very optimistic, we are also very careful.”

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