ISRAEL EXPECTED TO BE MIDEAST BREADBASKET

ARTHUR HAGOPIAN

JERUSALEM (FNS) -- The Israeli food industry is poised to become the breadbasket for the Middle East -- and for much of the world beyond, including the former Soviet republics. That outlook was expressed in many ways by food retailers, buyers and vendors who attended International Food Week at the Jerusalem Convention Center. The event featured a daylong seminar and exhibit floor. "I believe that Israel's food industry can play a significant part in meeting the needs of countries in the Middle East," said Uzi Netanel, chairman of the Israel Export Institute, at the convention seminar, called "Trends in the Food Industry on the Threshold of the 21st Century," he said.

"God has blessed us with a climate that makes it possible to grow a high yield of crops throughout the year, so that we have a large surplus for export," he said. "We have also been fortunate or skilled enough to develop advanced know-how, technology and equipment to improve the yield, nutritional value and shelf life of basic foods and to process them into attractive consumer products." Food Week, held May 9 to 12 here, attracted some 600 attendees from such established trading partners as the United States and various European countries and newcomers such as Nigeria, China and ex-Soviet-bloc members Ukraine, Romania and Poland. Attendance by representatives from the former Soviet republics may have been inspired by the fact that business between the region and Israel has increased dramatically since those markets have become more accessible to Israel.

Yair Ofek, deputy director general of the Export Institute, said exports to that part of the world now have the level of about U.S. $80 million, partly because many of this country's new immigrants retain excellent commercial connections with their former homelands. That theme also was sounded by Dan Propper, president of the Manufacturers Association of Israel and managing director and chief executive officer of the Osem group of companies. The group is Israel's leading supplier of soups, crackers, snacks, pasta and like products. Propper was one of several speakers at the Food Week seminar. "[New immigrants] know the market and the mentality," he said. "Up to three years ago, the markets of nearly one-third of the population of the world were banned to us." In contrast, many new markets are now open, especially to food producers. Propper pointed out that food constitutes 50% of all exports to Russia. In that vein, a seminar panel member, Liora B. Markus, marketing and export manager for wafer and ice cream cone company Man'amin Food Industries, said export success may hinge on the fact that the majority of Israeli food exporting companies are relatively small, offering flexibility. "We smaller companies were the first to export to the Soviet Union because we could take decisions and move more quickly," she said. As for other areas for export potential, Propper referred to the Palestinian sector by noting that "it is in our interest to raise their standard of living." While the Arab market is not rich, this is offset by a huge population and the proximity factor. "We can have a truck leave Jerusalem and arrive in Amman within two hours, in Beirut in four hours and Damascus in six hours," he said. Propper called on the European Economic Community to help the Palestinians by opening its markets to them, and thus cementing peace in the region. Gil Feiler, a professor at Bar Ilan University, who is also a consultant for Info Prod Research, Middle East, noted that the Arab market will continue to grow as populations double every 20 years. He told seminar participants that Israel will have "exciting opportunities" for trade with Arabs, once peace is assured, but also hinted there were risks involved: Israeli exporters must know the market very well to ensure success.

On the other hand, David Alphandary, president of the Super-Sol supermarket chain, told the seminar audience that "wait and see" is the proper stance. "Palestinians may not even need us there, and we may not even be able to open any stores in post-autonomy West Bank," he cautioned. Another seminar participant, Nathan Nissani, chairman of the Food Division of the Industrialists Association, said entry into the Arab market could become a springboard into the Third World. "Barriers are falling everywhere," he said. "The West Bank market is only the tip of the iceberg." As for trends in world food marketing and their impact on the Israeli market, Amnon Dik, manager of Jafora Tabori, which sells nectars, carbonated and noncarbonated soft drinks, foresaw a continued expansion by food chains.

But, he predicted, in order to survive increased competition posed both by locals and multinationals, food chains will have to consider big changes, even up to partnering with European firms. "In the long term, retailers will seek to specialize, and this will make them more profitable," he added.