Cheesemakers eye Israel as new destination

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Cypriot dairy producers are excited that Israel has lifted customs duty applicable to various cheese products, paving the way for halloumi to conquer another market.

In comments to the Financial Mirror, Chamber of Commerce and Industry representative Andreas Andreou said the island’s business community, especially dairy producers were happy to see the neighbouring country lift duties on selected products.

“Although Israel is Cyprus’ fourth largest trading partner, exports to the country are around 3-4%, as the Israeli market is tough to crack, as it was heavily protected with high taxes imposed on imports,” said Andreou.

“This could well change, especially for the flagship product, Halloumi, as Israeli authorities have decided to wave custom duties applicable on cheese products”.

Duty on cheese products, including halloumi, was lifted in February when Israeli Finance Minister Bezalel Smotrich signed a decree which cancels the applicable customs duty.

Authorities have explained that the cancellation of the customs duty on cheese is expected to lower the price to the Israeli consumer during inflated living costs.

“But this cancellation of the customs duty will also increase the variety of cheeses imported to Israel so that the consumer can enjoy a wider selection of cheeses, including, hopefully, our products”.

Until recently, Halloumi imports to Israel were taxed with a duty of NIS 8.32 per kg, equal to €2.13, making the market unattractive.


“The lifting of the tax does not mean the Israeli market will suddenly be conquered by halloumi.

“On the contrary, the market is still filled with challenges, mainly because exports must be Kosher”.

Andreou said that dairy producers interested in Kosher exports to Israel must set up a separate line of production approved by the Israeli authorities.

He added that making halloumi’s presence felt in Israel would be challenging for local producers as milk resources are just enough to cover local demand and already established exports.

“However, it is more than an attractive market for us.

“One of the main reasons is that it’s just next door.

“Transport costs will be close to nothing compared to other destinations, while shipments could arrive the very next day.

“What other market has this advantage?” said Andreou.

Halloumi cheese is considered ‘white gold’ worth €1.34 bln in exports from 2017-2021, with revenue expected to grow exponentially in the coming years.

According to the Ministry of Commerce, Cyprus dairy producers in the first nine months of 2022 exported 32,000 tonnes of halloumi worth €227 mln.

An increase of 23% from 2020 — the best year for halloumi exports.

The traditional cheese is a major export, along with citrus fruits, cement, potatoes, and pharmaceuticals, with a 16.8% share.

From 2017 to 2021, total halloumi exports yielded €1.34 bln.

The Global Halloumi Cheese Market was valued at $401 mln in 2021 and is expected to reach $905 mln in 2027 at a CAGR of 10.96% during the forecast period 2022-2027, according to Research and Markets.com.

Halloumi exports to Israel in recent years have been below the €200,000 mark, with the majority being Kosher Halloumi.

Sources from the Cyprus Embassy in Tel Aviv have confirmed that lifting tariffs on halloumi has revived interest from Cypriot companies, with the Commerce Ministry preparing a mission to Israel to facilitate future trade deals.

According to the Cyprus Statistical Services, total imports from Israel for the January-November 2022 were €780 mln.

Imports had doubled compared to 2021 when imports for the year were €403 mln.

This represents approximately 7.5% of Cyprus’ imports, an increase of 93.5% from 2021.

The increase is due mostly to the sharp increase in fuel imports, which represents 93% of total imports.

Israel is the fourth largest exporter (in 2021, it was 6th) to Cyprus behind Greece (€2.4 bln), Italy (€1.08 bln) & China (€811 mln).

Total exports to Israel for the first 10 months of 2022 reached €93 mln (Domestic exports were €73 mln, and re-exports €20 mln). In 2021 total exports reached €90 mln.

Total bilateral trade between Israel & Cyprus for January to November was €873 mln, increasing 77% from 2021 (€493 mln).