Who does the government want to get help from in the face of the Turkish boycott? Among other things, from the Palestinian Authority, after years and years of governments led by Netanyahu have ignored the Authority and even worked to weaken it against Hamas.
The Ministry of Economy now sees the Palestinian Authority as a means to deal with the emerging commodity crisis, since Turkish exports to it continue as usual, and Israel can ask traders in the Palestinian Authority to order for it the goods it needs. The idea is to transform the Authority into some kind of "third party" from which it will be possible to direct cheap goods to Israel.
Additional measures proposed by the Ministry of Economy are finding alternative import sources while giving preference to stable and reliable countries from the Mediterranean basin, at a reasonable distance from Israel.
The construction products industry is the main industry that may be affected by the Turkish boycott. In 2023, the total import of goods from Turkey amounted to approximately 5.2 billion dollars, of which approximately 2.8 billion dollars was for the construction industry alone. According to the Ministry of Economy, all the products that Israel has imported from Turkey for the construction industry in recent years are not unique to the Turkish industry, they are available to Israeli importers in the free market and a significant portion of them are available for production and purchase in the local market as well.
In Israel, Nesher is the only cement manufacturer, and there are other individual producers in the steel and iron sector that produce only about 40% of the needs of the local economy. It is doubtful that these companies have an incentive to expand their production capacities now, without a promise from the state that at the end of the war, imports from Turkey will not be re-established.
According to the list of alternative import sources of raw materials for the construction sector and the industry in general compiled by the Ministry of Economy, it appears that alternatives to the marble and stone products imported so far from Turkey can be found in Italy, Egypt, China, Oman and Jordan. As for cement, the source of which in the last decade was mostly Turkey, the Ministry of Economy suggests Jordan, Egypt and Greece as alternative import sources. Regarding the import of steel and iron products, the countries with the capacity to be an alternative to Turkey are Jordan, the United Arab Emirates, Italy, Greece and Russia - which is in a protracted war with the Ukraine and is exposed to sanctions from the West. Alternative import sources for copper products are the United Arab Emirates, Spain, and Vietnam.
But the influx of importers into the Turkish market is a result of initial prices that are much lower than the other alternatives offered. In addition to the low prices, Turkey's geographical proximity to Israel also added to its appeal as a source of import. For example, the duration of a voyage of a ship carrying goods from Vietnam to Israel is several weeks, and if it is forced to bypass the entire African continent to reach ports in the Middle East due to the attempts to disrupt trade with Israel by the Houthi rebels in Yemen, its journey becomes even longer and more expensive.
Importing through a merchant in the Palestinian Authority or in another country who will order and purchase the Turkish goods and then sell them to an Israeli importer also involves an additional 2-3% brokerage fee. The Ministry of Economy believes that the pricing issue is solvable and that the business sector will come to an understanding with international traders.
The Turkish boycott came after a decade of Israeli policy to remove protective quotas on imported products, sometimes at the expense of local industrial and agricultural production, and despite repeated warnings from industrialists that Turkey is not a reliable party.
The government ministries did not see the crisis with Turkey as having an unusual potential to escalate compared to past crises during the previous fighting rounds in Gaza, and the Turkish decision to stop trade with Israel was received by the MInistry of Economy and Foreign Affairs with complete astonishment. Now, the Ministry of Economy is trying to convey messages that reduce the intensity of the crisis, and claims that it trusts the business sector to overcome these difficulties thanks to "government assistance tools, guidance and activity" that have not yet been put on the table, and in any case, their effectiveness is yet to be determined.
As for the cars that are produced by international car manufacturers in Turkey and imported from there to Israel, senior officials in the Ministry of Economy said at a conference held on Thursday at the Export Institute that they are talking with the manufacturers to allow them to be imported through other countries.
However, the messages of the Ministry of Economy cannot comfort the public in Israel who continue to groan under the cost of living, and in the coming days will be forced to pay more due to the Turkish boycott. Many importers did not wait for the government offices to find alternative sources of imports and were wise to do so long before the Turkish Ministry of Commerce published, about a month ago, a list of 54 categories of goods, the export of which to Israel would be restricted.
Ciment of Israel Shipyards, a pioneer in importing cement from Turkey, announced even before Erdogan's trade restrictions, that it already imports most of its cement from Greece, and other companies in the industry have also started importing from Egypt.
While last October the average price of a ton of imported cement into Israel was about NIS 400, in recent days one of the importers, Akma Trading, announced that it will start importing cement from Spain and the price of a ton of cement, including delivery to the customer, will be about NIS 750.
In the last two weeks, more and more companies in the economy, most of them in the field of construction products, informed their customers about price increases due to the increase in the price of raw materials following the Turkish boycott and the increase in the prices of transporting goods. The Rav-Barih Group, which markets a significant part of its products to the construction products sector, will increase the price of all its products by up to 8%.
Tambour also informed its customers that towards the end of the month, it will increase the price of its plasterboards by 9%; Ashstrom Industries of the Ashstrom Group, which deals in concrete and construction materials, also informed its customers that it will soon raise prices. "Due to Turkey's announcement of a boycott of the export of products to the construction industry in Israel, we are working to bring products from alternative sources so that we can try and create business continuity".
