Iraq Emerges As Fastest-Growing Export Market For French
Cheese; Russia, Poland Also Growing

Volume 130, No. 50, Friday, June 16, 2006

France is the leading world exporter of cheese. Location and membership in the duty-free trade area of the European Union contributes to large exports of cheese. 

Yet, some of the fastest growth markets are outside the European Union. 
The fastest growth market for French cheese exports between 2003 and 2005 was Iraq. Other fast growing markets were Russia and Poland. 
Exports of cheese from France to Iraq increased from 173 tons in 2003 to 2,255 tons in 2005. 

The 2005 shipments were 13 times greater than those of 2003, and 77 percent above 2004. Exports of cheese from France to Iraq had reached 1,300 tons in 1988, but fluctuated at a low level between 1991 and 2001.
Expanding shipments to countries outside the EU limited the decline for total French cheese exports in 2005. 

Further growth for French cheese exports to the Middle East is likely in 2006. Cheese used for pizza and cooking may comprise a larger share of shipments to developing countries this year. 

French Exports Peaked In 2004
Total exports of cheese from France showed an upward trend between 2001 and 2004, rising from 523,092 tons to 583,320 tons, as the value moved up from $1.77 billion to $2.74 billion. 

In terms of value, France is the leading world cheese exporter, although Germany is usually the leading exporter in terms of quantity. 

The average price for exports of French cheese $4,705 per metric ton in 2004, compared with $3,464 per ton in 2000. The average traded price is about a fourth the retail price for Brie cheese in some US supermarkets.

EU Markets Are Major Customers 
Six countries of the EU are leading customers for French cheese exports.

The leading destination for French cheese exports in recent years was Germany, although deliveries to the top foreign market dropped 5 percent in 2005 to 116,093 tons. 

If recent trends continue, a close race between Germany and the UK appears possible. French cheese exports to the UK increased 19.8 percent in 2004 and by another 3.7 percent in 2005 to 100,392 tons. 

The third major destination for French cheese exports is another EU member. Exports of cheese from France to Belgium increased 4.4 percent in 2005 to 74,726 tons. Following a rise of 22.9 percent in 2004, French cheese exports to Spain rose another 5.7 percent to 57,197 tons in 2005.

Italy is a leading exporter or cheese, and also an important customer for other EU countries. French cheese exports to Italy dropped 14 percent in 2005 to 44,276 tons. Exports of cheese from France to the Netherlands were down a fifth in 2005 to 27,094 tons. 

Luxembourg has about one million people and an area similar to Rhode Island. Yet Luxembourg was a market for French cheese in 2005 for 24,846 tons – the leading per capita consumer of French cheese among other EU countries. Location and a deficit for domestic production may explain the large sales per capita to Luxembourg. 

French cheese exports to Ireland rebounded 11.4 percent in 2005 to 5,378 tons. French exports of cheese to Denmark dropped 6.2 percent in 2005 to 9,046 tons. Denmark is a major EU cheese exporter with expanding sales to the 15 members. 

Exports of cheese from France to Portugal were up 1.1 percent in 2005 to 6,345 tons. Sweden was a customer for 6,345 tons of French cheese in 2005.

Finnish purchases of French cheese increased 9.5 percent in 2005 to 1,139 tons. Part of the increased imports by Finland may have come from rising demand related to the busy boat trips from Finnish ports daily to Estonia and Latvia. 

Sales To New EU Members Mixed
French cheese exports directly to some of the 10 new members joining the EU in 2004 increased in 2005. 

Exports to Poland increased 53 percent in 2005 to 946 tons. French cheese exports to the Czech Republic advanced a fifth in 2004 to 873 tons, but dropped back by 5 percent in 2005.

Geneva is an important Swiss city for various international trade groups and organizations, where French is the major language. Some people who work in Geneva live is France. Travel from France to Geneva is easy for people with the convenient pass cards.

Neighboring Switzerland is not a member of the EU, but allows relatively attractive opportunities for imports of a wide range of products from France. 
Shipments of French cheese to Switzerland remained relatively steady in recent years. The 10,907 tons for cheese exported from France to Switzerland in 2005 was 1.1 percent below the 2004 level. 

Norway has remained outside the EU, but the former EFTA arrangements allow significant imports from EU members at attractive import duties. French exports of cheese to Norway declined a tenth in 2005 to 1,145 tons.
Competition For Middle East

France had significant exports of cheese to some markets in the Middle East, before Iraq emerged as an interesting growth market recently. 
Greater competition from East European cheese exporters offering lower prices tended to limit prospects for expansion of cheese exports from France to some Middle East countries. Ukraine and Bulgaria have attractive prices for cheese exports. 

French exports of cheese to Saudi Arabia averaged 6,460 tons annually during 2003-05. Exports of cheese from France to United Arab Emirates dropped from 2,520 tons in 2004 to 2,025 tons in 2005, and deliveries to Kuwait fell by a fourth to 1,631 tons in 2005. Lebanon was a customer for 4,237 tons of French cheese in 2003, but competition from East European supplies caused shipments to drop to 1,792 tons in 2005. 

French exports of cheese to Libya dropped by half in 2005 to 1,321 tons. Competition from exporters in other EU countries and East Europe contributed to the decline. French exports of cheese to Morocco increased to 1,177 tons in 2005 – about double the 2003 level. 

US imports of cheese from France increased 7.9 percent in the first two months of 2006 to 2,378 tons, although arrivals fell 13.6 percent to 18.768 tons in calendar 2005. The average price for US imports of cheese from 
France rose nearly a tenth to $6,586 per metric ton in 2005. 

Prices for some French cheese found in special displays of US supermarkets are in the range of $20 per kilogram, or about triple the reported border price when entering ports.

French Cheese Imports Steady
Imports of cheese into France reached a peak of 213,138 tons in 2000, before dropping to a low of 199,433 tons in 2002. 

Apparently higher prices for deliveries by other EU countries tended to slow down demand for more expensive cheese among some French consumers. Cheese imports into France rebounded 3.3 percent to 206,054 tons in 2003 and remained virtually the same in 2004.

The value for imports of cheese into France picked up from $682.6 million in 2002 to $818.1 million in 2003, before rising to a record $906.6 million in 2004. Germany, Netherlands, Italy, Switzerland, and Denmark are important suppliers of cheese imports into France. 

The average price for imported cheese increased in from $ 3,422 per ton in 2002 to $4,391 per ton in 2004, as consumers bought more of more costly types of cheese delivered from other European countries. 

US exports of cheese to France more than doubled in 2005, reaching 116 tons, valued at $189,000, for an average price of $1,629 per metric ton, compared with $1,895 per ton in 2004. US exports of cheese to France are small in comparison to total trade, but some sales of specialty items in airport shops may increase. •

John B. Parker was formerly an international economist with the Economic Research Service of the US Department of Agriculture

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