This initiative by the Israeli government is supposedly intended to strengthen trade ties with the United States. However, Israeli grain importers call the move an “economic mistake” that will cost the market tens of millions of dollars and cause an inevitable rise in prices for meat, poultry, eggs, milk and fish, Israel Insider reports.
The main problem, according to the association of grain traders who control more than 90% of the grain market in Israel, lies in a lack of understanding of the global market: the U.S. exports virtually no feed wheat. This means that Israeli livestock breeders will have to buy American food wheat as feed, which is much more expensive. In addition, logistics from America take weeks, and the cost of chartering huge Panamax-class ships is disproportionately higher compared to the rapid grain shipments by small dry cargo ships from Eastern Europe.
The sharp rise in the cost of feed will make local livestock and poultry farming unprofitable. And this will inevitably lead to the fact that the shelves will be filled with imported eggs, milk and meat from Poland, Turkey or Ukraine – countries that will continue to freely use cheap fodder. Thus, the attempt to artificially tie the market to the U.S. could result in the collapse of Israeli farming.
“The Finance Ministry’s initiative looks like an attempt to solve geopolitical problems at the expense of basic food security. Israel produces only 2% of the necessary amount of cereals and is completely dependent on foreign supplies (about 5.4 million tons per year). The introduction of barrier duties on cheap raw materials from Ukraine and Eastern Europe will not protect local producers, who simply do not exist in this area,” Israel Insider believes.
Will Moldovan farmers suffer?
At first glance, the potential blocking of feed wheat supplies to Israel will have little impact on grain exports from Moldova. Last season, Moldova significantly diversified its external wheat supplies, particularly focusing on European and Middle Eastern supplies of food wheat.
However, in previous seasons Israel was among the largest buyers of Moldovan feed grain. Therefore, the loss of this option in the structure of grain exports from Moldova is certainly not desirable. Moreover, last year Moldova signed a memorandum of understanding with Israel, according to which our country becomes a priority supplier of wheat to the Israeli market.
