A strong local currency, almost no scope to export to Europe and the war affecting the major export market of Russia, sharp increases in shipping and input costs all contributed to the toughest year for Israel’s carrot industry. “This year is one of the toughest years for Israel’s carrot industry. Agriculture exports in general struggled worldwide, but as long as you have a commodity like carrots and potatoes, you suffer even more due to the tiny margins,” says Amir Porat, CEO of Gezer Shluhot. They are organic and conventional carrot growers and exporters established in 1949, who are considered to be pioneers in this industry in Israel.
Photos by Amir Porat
“The Shekel is too strong. Anything that is exported, from high to low tech suffers. Inside perishables the more basic you go the more you suffer. In the carrot industry we are playing on tiny margins. The local currency is way too strong for us. We also had a sabbatical year for the fields to rest, where we could not plant or grow as a regular year. This influenced the local market, which dropped by 20-25% as the Israeli market had to import from other origins. The local market was damaged, all the costs raised dramatically. It now costs between 25%-30% per year more to grow produce, which is experienced by growers globally, but it’s very dramatic all taking place in one year. In the logistics, costs were even higher as for instance last season a container to the US cost $3 000, now it increased to between $10,000-$12,000,” explains Porat.
Amir Porat, CEO of Gezer Shluhot
Porat says Israel exported about 80 000 tons of carrots. His company Gezer Shluhot, based in the Bet Shean Valley of Northern Israel, exported around 24 000 tons of carrots to mainly Russia. They also export to Europe and the US, and they are known for their high quality and sweeter carrots, which are grown in heavy soils of northern Israel. Every shipment was different presenting many challenges while the market was generally bad overall he says.
“In our export markets in Europe there were high yields and maybe a record season. They did not need much support with imports during their season. This left us with the Russian market, it was sudden, but they still took 50% of our exports. The season is now behind us, we eventually managed to export almost as planned. Every week it was a fight to figure out the new restrictions, what will be the next rules, there were lots of changes in the shipping lines, clients cancelled etc. We were afraid also that in some cases the money transfer will be at risk. Eventually because it’s food, we kept on exporting to the Russian and the Ukraine markets. We did not stop, we exported to everybody who needs food, even though there was high uncertainty we managed,” states Porat.
“In July and June the market in Russia which usually get stronger, this year became weaker. The local season in Belarus and Russia started in mid- July. All in all it was a hugely challenging season. it was the perfect storm. In the end we managed to export almost 100% of our planned volumes. throughout the season we had to adjust, keep being flexible. This was combined with a lot of effort and good will between us and our customers to support each other not only the bottom line. We have our customer's support for many years, it was a combination of both sides compromising on the price and sizing aspects sometimes. Our clients support us and we support them back. Our relationships with our customers is our priority and we do everything possible to ensure the best quality for them. We will keep it going,” explains Porat.
Organic carrot prices a worry
“Organic carrots suffered a very bad market. We keep organic in our portfolio but we are busy drastically reducing it. It has 25% higher costs to grow while the market cannot pay extra. In Germany, the leading market for organic carrots, we send the best quality, but it wasn't enough in a hard market like that. We personally travelled there to see our clients, but it’s very sad to find and look at the numbers and understand that organic is not working. We will keep our eyes close to the market possibilities, we can’t supply at a loss. It’s a shame as we have developed the knowledge for growing high quality organics for many years. Unfortunately we had to decrease our production every year. We will mainly focus on conventional, purple, yellow or white carrots.”
Porat says they also see huge opportunity and growth in ready to eat, premium quality baby carrots, which they supply to a leading global fast food chain across Israel as well as in schools. “The baby carrots are a completely different variety. They are longer, sweeter and crispier and can be cut into pieces and shaped to make them ready to eat. It is also very hard to produce, but it’s a growing product in our business. I want to export it to every market in the area,” he concluded.