Halloumi producers banking on Chinese taste buds

But dairy producers fear they can’t meet demand due to the lack of goats’ milk

While halloumi exports are expected to hit record numbers, the Ministry of Agriculture has signed a protocol with China paving the way for the famous white cheese to wow a huge market, but farmers are feeling the squeeze.

The outlook is blurry as producers argue they may not be in a position to meet demand, feeling that pressure over the way the cheese is described in the Protected Designation of Origin (PDO) file may hamper growth.

“I don’t know if the deal with China is a blessing or a curse as we are struggling to cope with the already unprecedented global demand,” said Yiannos Pittas, export director of Pittas Dairy Industries.

Pittas – the largest halloumi exporter – said that exports are expected to increase by the end of the year to 26,000 tonnes from 23,000 last year.

And Yiannos Pittas is adamant that the growing demand abroad will not see Cyprus go without.

“As producers, we value the local market and we are giving priority to it. There is no way Cyprus will be left without halloumi, nor will prices be affected”.

Halloumi exports are closing in on EUR 200 mln, recording, as of October 2018, a 15% increase compared to the whole of 2017 when the dairy industry exported EUR 156 mln.

If dairy producers’ expectations are met, then 2018 will see exports of the squeaky cheese double since 2015 when EUR 103 mln worth of halloumi was exported, breaking the 100 mln barrier for the first time.

Although excited over the prospects of halloumi entering a huge market such as China, dairy producers fear that milk production, and especially that of goats’, will not suffice for the production of the traditional cheese.

The protocol is expected to significantly increase the exports of Cyprus’ flagship dairy product, as producers can directly send their halloumi to China by removing red tape.

“Halloumi producers will be able to export their products without needing a health certificate issued for each batch,” explained a Ministry of Agriculture official.

Agricultural Officer Sokratis Sokratous said the protocol came about after initiatives taken by Cypriot and Chinese businessmen, with the Ministry intervening to facilitate the trade with China.

Halloumi is already present in the Chinese market, but the protocol will bolster efforts.

“Just recently, an agreement between a local producer and a Chinese company regarding the export of dairy products worth EUR 2.5 mln was signed, with halloumi being the main item on the list”.

Sokratous said that the protocol with China describes the product and designates the sanitary conditions for the production of halloumi.

“The Chinese authorities were concerned over hygiene measures taken at the factories. After inspecting five production units, they have approved them for exports. Another eight are to be inspected soon,” he said.

“The protocol puts strict guidelines. If you don’t comply then the protocol is void. If there are any traces of milk powder, they stop imports the next day.”

The officials said that Agriculture Minister Costas Kadis has asked for the Chinese authorities to speed up the inspection processes.

Dairy producers unsure

Andreas Andreou, General Secretary of the Dairy Producers, told the Financial Mirror that the association is excited over the prospects but are deeply concerned they may not be able to meet new demand as they are already faced with a shortage of milk.

He added that things are tight as it is, with high demand from European markets such as the UK, Sweden and Germany, while demand from countries such as Australia, with big Cypriot communities, are growing rapidly.

“Exports of cheese products to the UK alone for the first eight months have seen an increase of 15% compared to the same period last year, reaching EUR 142 mln. Halloumi accounts for more than half of UK cheese exports,” said Andreou.

“We are excited to see the Chinese market being added to our list. And let’s face it, who doesn’t feel optimistic about the future of halloumi, knowing that it is served for breakfast at Hong Kong’s hotels?

“But this poses its challenges, as we are short of milk, especially goat and sheep milk.”

Andreou said efforts are underway, both from authorities and farmers to deal with a possible shortage. But the association feels that efforts are being undermined by the description of the product’s ingredients, submitted to the European Commission as a PDO.

The sticking point is the ratio between cow’s milk and goat and/or sheep’s milk included in the description of halloumi filed with the EU.

Currently, producers make halloumi with a ratio of 8020% of cow’s to goat or sheep’s milk, while the description of the file says that halloumi should be produced with a minimum of 51% goat or sheep’s milk as of 2024.

“Such a ratio would spell disaster for the industry as there is not enough goat or sheep’s milk being produced, nor is there enough livestock to produce the milk needed,” said Andreou.

And conditions have radically changed since the file was submitted in July 2015. “At that time, we were exporting only EUR 20-30 mln worth of halloumi”.

There is also the taste of the cheese to consider.