Economy Ministry says no trade disruption with Ukraine, Russia but price hikes possible

The Israeli Ministry of Economy and Industry says there have been no disruptions so far to trade of goods and services with Ukraine and Russia, respectively, amid the ongoing Russian invasion of its western neighbor, but warns of possible price increases on raw agricultural imports to Israel such as wheat.

Both Russia and Ukraine are major exporters of wheat and other grains and the crisis threatens to disrupt the global supply chain. Russia is the world’s largest supplier of wheat and Ukraine accounts for around 12 percent of global supply, according to the US Department of Agriculture.

According S&P Global Platts, Ukraine wheat exports between July 2021 and June 2022 were projected to reach 22.5 million metric tons. The US Department of Agriculture forecast the country’s wheat exports at 24.2 million for that period.

According to an assessment by Ron Malka, director-general of the Economy Ministry, a shortage of essential goods was not expected, but “there may be price increases due to supply difficulties resulting from the fighting in Ukraine,” the ministry said in a statement.

The government body says it is coordinating situational assessments on economic matters with the Manufacturers Association of Israel, the Federation of Israeli Chambers of Commerce, Israeli companies operating in Ukraine, and other government ministries.

Bilateral trade between Israel and Ukraine stood at nearly $800 million 2020, according to the Economy Ministry — some $650 million in imports from Ukraine and about $135 million in exports from Israel.

A majority of Ukrainian imports to Israel (67%) are raw agricultural products like grains and food products, while most exports from Israel to Ukraine (62%) are chemical and industrial products, according to data provided by the ministry citing the Central Bureau of Statistics.

Agricultural and food imports from Russia to Israel were about 15% in 2021, according to the data.