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European Commission Closes Private Storage Aid For Cheese; Irish Groups Want EU To Consider Export Refunds As Alternative

The European Commission on Tuesday closed the measure for Private Storage Aid (PSA) for cheese following a disproportionate surge in interest for PSA from cheese producers in certain regions not traditionally exporting significant quantities of cheese to Russia.

The move is a precautionary step to avoid the possibility of reaching the maximum volume of 155,000 tons (342 million pounds) so soon after the measure was opened on September 5. To ensure the respect of that maximum quantity, a notification and monitoring mechanism was set up.

According to the UK’s DairyCo, between September 8 and September 21, just over 100,000 tons (220.5 million pounds) of cheese entered the PSA scheme. The majority (83,956 tons) was offered by Italy, although that country exported just 7,200 tons of cheese to Russia in 2013.

While the effects of the Russian import ban impact potentially the entire EU market for cheeses, the most affected EU member countries are Finland and the Baltic States for which Russia is the exclusive trading partner for cheese and Germany, the Netherlands and Poland, for which Russia is a significant destination for cheeses, the Commission noted.

Further, while cheeses with a geographical indication (GI) are affected by the import ban, they represent only a minimum share of the entire range of cheese exported to Russia, the Commission noted.

The Commission had announced in late August that it would be opening Private Storage Aid for butter, skim milk powder (SMP) and certain cheeses in order to alleviate the impact of Russian restrictions on imports of
EU dairy products and to limit the negative effects on the internal market (for more details, please see “In Wake Of Russia’s Import Ban...,” on page 1 of our Aug. 29th issue.

Notifications for PSA volumes of skim milk powder and butter were much in line with expectations and the PSA measures remain open for these products, the Commission stated. Similarly, public intervention for butter and SMP will be open until the end of the year.

EU exports of cheese to Russia last year amounted to more than 250,000 tons (including certain fresh cheeses which are not suitable for storing and therefore not eligible for Private Storage Aid), roughly one-third of total EU cheese exports. Moreover, Russia is an exclusive trading partner for cheese for Finland and the Baltic countries (about or over...more