Case study: Israeli produce in Russia

We’re now nearly four years into the Russian ban on EU/US-produce. To plug market gaps, other agricultural producers are stepping up their exports of in-demand products. Israel is one such nation.

Trade between Russia and Israel is rising, as seen throughout 2017. From January to September, mutual trade grew 25%, hitting $380 million. This also includes an 8% rise in Russia’s imports from Israel. Food and drink items are big export commodities for Israel – especially in its Russian-focussed trade. According to the MIT Atlas of Economic Complexity, an online trade database, Israel’s total exports to Russia came to $621m.

Exports of foodstuffs amounted for a roughly a third of that total. According to Zvi Alon, Chairman of the Israel Plants Production and Marketing Board, Israel earns a billion dollars a year from agricultural exports. Russian sales account for a quarter of this total.

nough with the cash, let’s talk actual food. Israel’s chief exports to Russia are fruit and vegetable varieties. Tomatoes, peppers, potatoes, carrots, and avocados are amongst the top export products for Israeli producers. For instance, Israel fruit and vegetable producers Galilee Export sends 10% of its crop to Russian buyers, reflecting an Israel-wide trend. Approximately a tenth of imported avocadoes in Russia will be of Israeli origin.

Peppers, carrots, and potatoes, however represent an almost holy trinity for Israel exporters. It's these three vegetables that account for hundreds of thousands of tons in Russia-bound shipments a year. Russia buys around 150,000 tons of carrots a year from Israel. 50% of Gezer Shallit’s carrot crop goes to the Russian market a year, for example. It’s the same for peppers – approximate exports of 150,000 tons a year. Indeed, Gilad Desert Produce’s main export market for its yellow peppers is Russia. Total annual Israeli pepper sales in Russia market come to around $50 million.

Potatoes, of which Russia is a major consumer, is the agriproduct showing most promise for Israel’s farmers in Russia. Prior Russia’s embargo on agriproducts from the EU, Israel was exporting roughly 9,000 tons to Russia. Come 2014 and the volume had skyrocketed to 73,000 tons.

Dairy from Israel to make its way to Moscow

In January 2017, after close inspections from Russia’s food and animal safety service Rosselkhoznadzor, Israeli dairies were given the go ahead to export their products to the Russian market. Now Israeli companies, such as industry-leaders Tnuva, can export milks, cheeses, and other dairy products. However, much of this produce will be kosher, and focussed mainly on supplying existing Jewish communities in Russia.

Russia’s Jewish population is the world’s sixth largest, presenting a captive market for Israel’s dairy producers to market into. Additionally, given Russia’s recent issues with “fake” dairy products (i.e. products not using real milk), the quality of true dairy products will position brands like Tnuva high in Russian consumers’ minds.