Despite the plunge in the pound since Britain voted last week to leave the European Union, many Israeli exporters say they’re not giving up on the British market.
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The decline in sterling – 10% against the dollar and 9% against the shekel – makes imports to the U.K. more expensive for British customers.
The pound is currently worth 5.17 shekels and about $1.33. Last Wednesday before the referendum, sterling was at 5.70 shekels.
But Avshalom Nussbaum, a marketing manager at Palram Industries, which sells goods like storage sheds and pergolas, says there’s no need to panic.
Palram’s wares run from hundreds to thousands of pounds. Of the company’s $50 million in annual exports, about 15% has gone to Britain.
“When there’s such a dramatic change in the exchange rate, it has a substantial effect on profits. I’m not rushing to long-term conclusions. I don’t think anyone can really understand where this is leading,” Nussbaum said.
“From my point of view, the harm to profitability in Britain is short term since it results from the exchange rate. Even if the rate doesn’t return to what it was, it’s not damage that can be dealt with. There is though the option of raising the price we charge; I think this can limit the damage.”
If necessary, he’ll raise prices in Britain a bit, which will put a dent in the sales growth the company has envisioned there.
Rami Hessel is the export manager at Mehadrin Tnuport, which sells agricultural produce in Britain. He says he’s in a relatively good position because the export season only begins in September, including heavy exports of grapefruits.
Still, payments on produce shipped last month are coming in now and the company is absorbing the cost of the sinking pound.
“The English still have to eat,” he said, adding that he expects prices to rise to cover the devaluation, though maybe not in full.
Hagai Chass is the marketing manager at Tel Aviv-based D.F. Omer, a producer of plastic products that generates more than 20% of its sales in Britain.
“We’re not panicking because things will ultimately stabilize. We’ve talked to our customers,” he said. “They understand the situation and some understand they’ll have to [adjust]. So we’re being cautious but we’re not stressed. We haven’t had cancellations or cuts in orders.”