Does the Israel-Hamas War Impact Grapefruit Exports?

Following the Israel-Hamas war, Israel's defense forces mobilized over 300,000 reservists for duty – people who used to contribute to Israel's USD 565-billion economy. Israel has blocked the Gaza Strip entirely, which led to a shortage of essential supplies, including food, water, electricity, and fuel, in the densely populated territory of Palestine. The state is home to 2.4 million people at one point, prompting concerns of a humanitarian crisis. The Israel-Hamas conflict had a notable impact on the strategically significant Port of Ashdod, situated approximately 20 miles north of the Gaza Strip. This port is currently operating in “emergency mode” status. The port of Ashdod is a key hub for agricultural exports, including grapefruits.

Figure 1: Israel-Hamas Conflict: Attacks from Each Side

Sources: Israel Defense Forces, Hamas, CNN reporting

Israel is one of the world’s major producers and exporters of fresh grapefruits. According to Tridge, the country ranked as ninth largest producer globally. As seen in Figure 2, there has been considerable growth in Israel's grapefruit production over the past two years. According to Foreign Agricultural Service of the United States Department of Agriculture (USDA FAS) data, Israel’s grapefruit production is forecast to climb to nearly 200 thousand metric tons (mt) in the 2022–23 season. In Israel, there are currently 4,000 hectares (ha) of land dedicated to grapefruit cultivation.

Initially, farmers reduced their grapefruit plantings due to declining demand. However, in recent years (2021-22), there has been an emerging demand for Israeli grapefruits in Asian markets, including in South Korea.

As shown in Figure 3, Israel is the seventh largest exporter of fresh grapefruits in the world, with a 9.25% market share in 2022. The export value of Israel’s grapefruits was USD 63.82 million.

Figure 3: Top 10 Exporting Countries of Fresh Grapefruit in 2022

Source: Tridge

The Israeli grapefruit season typically begins in late October to early November and lasts through April of the following year. This is when grapefruits are at their peak in terms of availability and quality. The new 2023-24 grapefruit season in Israel has already begun. But because of the ongoing conflict with Hamas, there are a lot of concerns over the harvest and supply to international markets this year. The Israel-Hamas conflict is expected to impact the trade of fresh grapefruits from Israel in the short term.

The first visible impact of the Israel-Hamas War will be an increase in the total import price of fresh grapefruit from Israel. On October 18, 2023, South Korean logistics company HMM announced a war risk surcharge (WRS) on Israeli cargo. Israeli logistics company ZIM has also announced an additional fee in light of the war situation.

Overall shipping of Israeli fresh grapefruit is also on alert as Israel’s war with Hamas doesn’t seem to be showing any signs of resolving soon. According to Tridge data, major export destinations of Israeli fresh grapefruits are France, Russia, and the Netherlands. Figure 4 below shows the Top 10 export destinations of fresh grapefruit from Israel with export value.

Figure 4: Top Export Destinations of Fresh Grapefruit from Israel

Source: Tridge

Some European importers reported that they are preparing to import fresh grapefruits despite the attacks and ongoing conflict in Israel. According to a Belgian import company, their grapefruit suppliers located in the Jerusalem area are operating as usual without interruption.

The ongoing Israel-Hamas conflict has profound implications on both sides, resulting in significant human casualties and economic repercussions. Israel's defense forces mobilized over 300,000 reservists, impacting various sectors crucial to the nation's economy. The blockade in Gaza led to severe shortages of essential supplies, raising concerns of a humanitarian crisis. The conflict has notably affected the Port of Ashdod, a vital hub for agricultural exports, including grapefruits.

Israel remains a major global producer and exporter of fresh grapefruits, with a notable surge in production in recent years. However, the conflict's short-term impact on the grapefruit trade is evident, with an expected increase in import prices and additional fees imposed by logistics companies. While European importers are preparing to continue fresh grapefruit imports, the situation remains dynamic, with uncertainties regarding the resolution of the Israel-Hamas conflict in the coming months.

References and Citations

1. Tridge Grapefruit (HS Code: 080540) Databasehttps://www.tridge.com/intelligences/grapefruit/export

2. Foreign Agricultural Service of the United States Department of Agriculture (USDA FAS) https://www.fas.usda.gov/

3. Citrus Industry Media: Most Israeli Citrus Crops to Increasehttps://citrusindustry.net/2023/02/01/most-citrus-crops-in-israel-to-increase/

4. Fresh Plaza: The Israeli Grapefruit Season Seems to Be Continuing for Nowhttps://www.freshplaza.com/asia/article/9568101/the-israeli-grapefruit-season-seems-to-be-continuing-for-now/

5. UN News: Israel-Palestine: Gaza death toll passes 5,000 with no ceasefire in sight https://news.un.org/en/story/2023/10/1142687

6. CNN: Israel is at war with Hamashttps://edition.cnn.com/2023/10/16/middleeast/israel-hamas-gaza-war-explained-week-2-mime-intl/index.html

7. India Shipping News: Ashdod Port First War-related Surcharges Announcedhttps://indiashippingnews.com/israel-hamas-war-10-of-ashdod-port-staff-recruited-by-israeli-army-first-war-related-surcharges-announced/