Exports to Turkey Remain Strong, at $100m a Month

Israel exports to Turkey did not drop after the Gaza flotilla incident in May, the Israeli Credit Insurance Company reports; Israeli travel agents start offering tour packages to Antalya again.

Israeli exports to Turkey did not drop at all after the Gaza flotilla incident at the end of May, reported the Israeli Credit Insurance Company, which provides foreign trade insurance.

It turns out that fears that Turkish companies would exploit the political situation to avoid paying for goods were unfounded - at least for now. As a result, ICIC has not reduced its credit lines for exports to Turkey, despite the higher political risk.

The ICIC reported that Israeli exports to Turkey remained at $100 million per month in June and July. This comes out to $1.2 billion a year, similar to the pace before the flotilla clash.

The political fallout apparently didn't harm new export agreements, either: The demand for credit insurance for new deals between Israel and Turkey has not fallen.

There were 26 new export deals to Turkey in June and 33 in July, similar to the rate in the months preceding the flotilla, reported ICIC. Most of the deals were in the chemical, plastics, metal and equipment industries.

"Turkey is considered one of Israel's most important export markets, and it is very important to see that despite the images of big demonstrations there, in practice Turkish business people have not cut their ties with Israel, as of now," said CEO David Milgrom.

ICIC provides more than $12 billion a year in credit insurance for 115 countries, for both foreign trade and domestic credit. Credit insurance guarantees the seller will receive its money even if the customer does not pay, whether for political reasons - which may include war, a coup, a ban on currency exports, a moratorium, nationalization or cancellation of import license - or for business reasons related to the company, such as insolvency or financial difficulties. The insurance covers 90% of the sum, while the remaining 10% is considered the deductible.

ICIC is owned in equal parts by Harel Insurance, Bituach Haklai and Euler Hermes, the largest credit insurer in the world.

Back to Antalya

Israel's travel agents have started offering tour packages to Antalya again. The Turkish coastal resort has been a favorite spot among Israelis for years, but visits came to an almost complete halt following the flotilla fiasco three months ago.

Flying Carpet is renewing its flights to the city starting August 2, using the Turkish charter airline Onur Air Tasimacilik. It's offering a 6-night package starting at $600 per person for a double room. The Antitrust Authority says that Onur flew 52,000 passengers in the first half of 2010, down 2.2% from the same period of 2009. (Zohar Blumenkrantz )