Agrexco, Israel's primary exporter of fresh produce, has terminated its 30-year agreement with CAL Cargo Airlines, and signed an agreement with El Al to transport the company's wide range of products to Europe.

CAL was established by farmers' organisations and is still owned by them, and served Agrexco since it was established. However, sources at Agrexco said "the move to El Al stems from economic reasons”.

According to the agreement, El Al will transport over 70 per cent of Agrexco's volume of fresh produce during both the winter and summer seasons. The new agreement will go into effect for one year from December with an option to extend it every year for the next three years. Agrexco's volume of air-transported produce in 2004 amounted to 34,000 tonnes, of which El Al carried 18,000t.

Trade sources in Tel Aviv said the move came as a "real surprise" because of the close relationship Agrexco and CAL Cargo Airlines had shared for three decades.

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