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Short supplies boost prices for Israeli fresh herbs
“The weather, not just in Israel but all over the world, has been disastrous, and that's caused a lot of changes in the field,” said Omer Kamp of Arava Export Growers. “Second, local production in Europe was completely diminished in September. We were supposed to have supplies into October, but now we have big shortages.” In addition to a supply-side problem, shortages have been pronounced because of increased demand. With Europe still feeling the effects of an economic recession, consumers have not gone out to eat as often. When they stay home, they won't use fresh herbs in their cooking as efficiently as restaurants do, so consumption has been on the rise.
“The shortages have been good for growers and the industry because people are paying more and it's solved the currency issue,” said Kamp. “I think these shortages will continue into October because I've gotten calls from people I've never gotten calls from, and they're asking for fresh herbs.” But in the long term, Kamp acknowledged that competition from growers in Africa, particularly Kenya, could threaten Israeli growers.
“It's been a bad few years, and some growers have just closed down because they ran out of money,” said Kamp. “You see a reflection of that in the acreage. For fresh herbs it's not so much because you know the prices and if you have a bad year you can close down in a day, so you are more flexible. But for something like capsicum, you sell on consignment and you take a big chance.” Because of that, Kamp estimated that acreage for fresh herbs is down about five percent from the previous season, but acreage for all fresh produce is down by about 15 percent.
“You can work in cooperation with growers in Africa in the short run, and we do work with them, but that's not a solution in the long run,” said Kamp. “Everyone will benefit for about three or five years with cooperation, but after a while, growers in Kenya will realize that they can do their own marketing and they will cut out the middleman.” For that reason, Kamp believes the way forward is for Israeli growers to adjust and innovate in order to compete with rising competition.
“For capsicum, for example, we will export more because more exporters closed down, but Israel, as a whole, will export less,” said Kamp. “For the future, we have to be innovative and make modifications or we will have no future.”
For more information:
Arava Export Growers
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