The market for agri-commodities in Israel is projected to grow at a CAGR of 5.50% during the period 2020-2025, according to a survey conducted by an independent market research organization. The market drivers for this growth are increasing progress in agricultural innovation along with high investments made in research and developmental activities. Some of the most popular products of the Israeli agricultural market are tomatoes, carrots, turnips, bananas, and grapefruits. Significant agricultural exports from the country include dates, avocados, pomegranates, almonds, and olive oil.
In recent times, the country has grown a lot in terms of social and economic development. In the last couple of decades, the focus on foreign investments and resources has increased significantly.
Since, 2012, the GDP of Israel’s agriculture has reached heights of 4600,00 ILS and has been continuously fluctuating around 3500,00 ILS million. New methods of farming and the use of new technologies and deals have made agricultural commodities trading and market-relevant in Israel in recent times. Some of the trends in the agriculture sector in the country are mentioned below:
Focus on Research and Development
Agriculture has benefitted from the increased spending and high investments in advanced technical innovations such as precision agriculture, leak prevention technologies, and drip irrigation, among others.
Israel holds a leadership position in agricultural technologies pertaining to farming in arid conditions. Agriculture in the country thrives in the induced environment through technical innovation in water-related technologies. In the period 2016-2018, there was an increase of 8.8% in the gross domestic spending on research and development in Israel.
In Israel, collective agricultural communities are prevalent, where resources and land are shared, because of the limited availability of these resources for self-sustaining individual farming.
More Imports than Exports in Agri-Trading
There has been a lot of resources invested into exporting products from the country. However, more resources are spent on imports of grain and consumer-oriented agricultural products. In 2019, $2,182 million was spent on agriculture exports and $6,786 million went into imports.
Organic produce constitutes around 1.5% of the total agricultural output of the country and 13% of agricultural exports. The country comes with 7,000 hectares of organic fields, where the crops grown are vegetable crops, fruits, hothouse vegetables, and herbs.
The Increasing Importance of Processed Food
A large number of Israeli companies are working with multi-national food companies such as Nestle and Pepsi Co., bringing the processed food industry to the forefront.
Recently, the government of the country has unveiled a plan to cut customs duties and lower the costs of fresh produce. Israeli farmers would also be provided with direct and other support as part of the plan. It is expected that the consumers would be saving around 2.7 billion shekels in a year after as a result. This plan would be a part of the economic package that comes with the 2021-2022 budget. It includes an easing down of regulations on the imports of vegetables and fruits and the government sources expect a sizeable increase in the range of products being offered in the country after the plan comes to force.