A leading Israeli exporter to Russia continues to find ways to provide borscht (prepacked vegetables for Russian soup) to consumers in that market, despite global sanctions due to the ongoing war in Ukraine. BeFresh Ltd. based in Tel Aviv, Israel is an importer and exporter of fruit and vegetables and describe themselves as the leading supplier to Russia over the past four years. However, trading conditions are challenging and they have had to look to expand trading to Greece, Cyprus, the Middle East, Japan, USA and East Europe.
According to CEO Oksana Goldenberg, they are using the lessons learned in earlier 2014 EU sanctions against Russia, to find payment systems and send the needed produce to feed people.
“BeFresh has a strategic partner company in Russia. We are the only Israeli exporter that can supply solutions in Russia for repackaging and logistics. In Russia, we are in cooperation with our partner company on all kinds of projects. This includes the promotion of special products for example we create a bag for making soup called borscht (Russian soup) as a set, we put in a package two potatoes, one carrot, one beetroot, one onion and a little bag of spices for it, and on the package you have instruction how to make the soup.
"We are working also on a packaging project for products that are not going well in our local market in terms of sizes and colours. We package them in a special package similar to what Europe have in their markets, and then sell them in the Russian market, so actually we are doing something new in the Russian market. By doing that we maximize all grower’s sales. We are the only company that brings this change to Russia. However, this project is now on hold because of the hard time nowadays for the Russian consumer, this kind of product has become a bit expensive, but we can see it happening in the near future,” explains Goldenberg.
She says BeFresh has agreements and directly sells, citrus, avocado, mango and pomegranates from Peru, Kenya and South Africa to Russian food chains. The company’s flagship products are radishes – 7 000 tons, carrots – 15 000 tons, capsicums – 6 000 tons, avocados – 3 000 tons, celery – 3 500 tons, potatoes – 2 000 tons, and more produce such as pomegranates, persimmons, eggplants, citrus, mango and others.
“Therefore our company also invests in crops and farmers as well as exporters, and we market it later on to Russia, Greece, Cyprus, the Middle East, Japan, USA, East Europe and to the local market as well.”
BeFresh CEO Oksana Goldenberg
“As for the war in Ukraine at first we were all shocked by the situation, as this placed a lot of pressure on all financial matters from the Russian clients, and there were problems with the payment and swifts. In 2014, there was a big crisis in Russia when the Western countries led by the European Union and the United States, imposed economic sanctions on Russia. The crisis affected exporting from Israel as well.
"Back then we had more quantities than today and we were one of a few companies that continued exporting from Israel to Russia in spite of all these crises, and we knew how to handle all changes with the currency with all kinds of financial tools. Many other Israeli exporters lowered their volumes to Russia while we continue working as usual. All entrances from Europe to Russia were blocked out. This opened a window for other competitors eager to enter the Russian market like the Turkish, Egyptians, Iranians, and Moroccans. Following these competitors, the demand for Israeli products decreased,” states Goldenberg. 
“Nowadays the war with Ukraine has made all kinds of financial matters with Russian clients difficult, but we solve it in all different ways and always know how to bring a financial solution for the grower in spite of all concerns. All financial matters in the Russian market have been resolved, while there are sometimes still money transfer problems, because the Israeli banks introduced all kinds of strict tests. And again, all this info is as of today! It should be noted that since the beginning of the war the work with Ukraine has stopped because there is no assurance that the money will be paid, also the port of Odesa has stopped working. We started to look for other destinations such as Europe through our subsidiary BeFresh (Europe). Due to the complicated situation with the Russian market, therefore we are aiming for the other destinations,” says Goldenberg.
Increased freight rates, strong Shekel
She says the challenges for Israeli exporters are compounded by a strong local Shekel. That was very difficult to work with because it hurt both exporters and the farmers when the clients transferred US dollars and they had to change it into the stronger local currency.
“Because of the lower demand from Russia the freight rates becomes more expensive. We know that in Israel everything is expensive anyhow, therefore, it allows all kinds of competition from other countries to approach the Russian market. It is very difficult to stand up to the global competition when the Shekel is getting stronger and all the services we need are going up in price. This includes sea transport, but over the past few months, we can see that the US dollar is getting stronger in Israel but weaker in Russia and, because of these effects on the Russian market, sometimes the demand can be strong and sometimes weak, it all depends in the currency situation,” concludes Goldenberg.
For more information:
Oksana Goldenberg
BeFresh
Tel: +972 (0) 722555135
Email: office@befreshcorp.net
http://www.befreshcorp.net