The falling euro combined with the fallout from last months' volcanic ash cloud, may be threatening Israel's agricultural exports.
Agriculture Ministry Director-General Yossi Yishai says he is predicting a drop in Israel's exports to Europe if the euro rate falls below 4.7. The euro traded at 4.72 shekels on Tuesday.
At present, 70 percent of Israeli agricultural exports are sent to European Union countries such as Belgium, France, Germany and Holland, as well as other smaller nations in central and southern Europe. But the dropping euro has resulted in a complicated financial picture abroad that has affected Israel's exports as well.
Flower growers both in Israel and abroad suffered major losses last month after the eruption of the Eyjafjallajokull volcano in Iceland spewed volcanic ash into the atmosphere, paralyzing air travel throughout Europe. In Israel, some 40 million flowers could not be shipped abroad due to the European airport shutdowns, resulting in a loss of 20 million shekels ($5.3 million). While some of the produce was sold domestically at lower prices, most of the blossoms simply went to the waste bin instead.
Moreover, the damage was not covered by insurance, although growers have demanded compensation under the law covering farmers harmed by natural disasters.
There has been some good news, however: peppers brought a good return in the European marketplace this season, thanks to bad weather in Spain, Israel's biggest competitor.
According to Agricultural Association Secretary-General Avshalom Whelan, peppers led as Israel's top agricultural product. “The question is, what will happen next season if our competitors have a good year and the euro continues to drop,” he said. “I have no doubt that a continued drop in the euro will complicate matters.”