Exports of British cheese and butter are soaring as suppliers take advantage of favourable exchange rates to seek lucrative margins abroad.

Butter exports increased by 40.2% to 9,625 tonnes between January and July this year compared with the same period in 2010 [Eurostat/DairyCo]. Over three-quarters of the additional 2,762 tonnes sold was bulk butter exported to other EU countries, with the remainder coming from packet butter sold to the EU and bulk butter on world markets. Over the same ­period, cheese exports increased by 15.5% to 69,246 tonnes, with 43.2% of the 9,276 tonnes' growth contributed by Cheddar.

Growing demand abroad coupled with favourable ­exchange rates and strong prices meant UK dairy products were able to generate good margins outside of the UK, said First Milk commercial director Richard Hollingdale. He added that First Milk was increasingly exporting Cheddar around the world. "While the UK will always be our core market, the opportunities and demand in the world marketplace right now are strong," Hollingdale said.

UK suppliers have plenty of Cheddar available at present and exports do not yet add up to big enough volumes to put a squeeze on UK supplies and prices. But this could not be ruled out in the future, said Wyke Farms MD Richard Clothier. "If this trend continues, it should give UK dairy companies and farmers opportunities outside of UK retail, which will drive prices up in the UK," he said.

Outside of Europe, populations were growing and becoming wealthy, creating more and more opportunities for British dairy suppliers, Clothier said.

The figures come after a number of significant international deals for UK dairy suppliers.

In February, First Milk launched a partnership with Eilers and Wheeler to increase exports of dairy products.

Meanwhile, Fayrefield Foods struck a deal with Australian supermarket Coles to get its Collier's Powerful Welsh Cheddar listed there in July.