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Israeli pepper growers under pressure from Russian crisis

The quick devaluation of the Russian currency is taking a big toll on exporters and will put huge pressure on many of them. Mr Avi Kadan, of the Israeli company Adafresh, states that “the big question is who will survive and who will not, depending on how much the Rouble will fall.”

This situation has coincided with yet another bad start for Israel’s pepper campaign. “The problem is that I don’t see alternative crops in the Arava Valley, but luckily, it’s only the start of the season; we have another four months to go, and if pepper prices are still reasonable with the new Rouble rates, we will be ok,” affirms Avi.

The key aspect to take into account is that Russia is a very important market for Israeli pepper growers, and Avi assures that Government funds may be needed to help palliate their debts. “The situation for exporters will depend on the percentage that the Russian market represented for them and who their clients were. Those trading with supermarkets in U.S. dollars, for example, will be in a good position.”

For Adafresh, the impact of the Russian crisis will not be as bad, as overall, Russia only accounts for 5% of the company’s business. “We have a strong partner with us and are Europe-oriented, but for sure, other companies lacking marketing channels may suffer.”

Meanwhile, in Europe, the situation is similar, and even a little better than last year. However, “a lot of peppers that were intended for Russia will now end up in Europe, so there is a risk the market may collapse,” states Avi.

This naturally has led Adafresh to look for opportunities in alternative markets, namely in America. “We used to be very strong there, until the air freight price became too expensive for us, but with the current oil price sea freight is an option and the U.S. is certainly becoming again a good option for November December, with the advantage that we won’t need to develop it from scratch,” concludes Avi Kadan.

For more information:
Avi Kadan
Email: [email protected]