Milk Powder Export Ban Pits Cooperatives Against Corporates
INDIA - At a time when international prices of skimmed milk powder (SMP) are hovering at around Rs 200 a kg, compared with only about Rs 110 to Rs 125 in domestic market, the makers of SMP don’t want to miss the bus.
5 September 2007
2 minute read
"The agriculture sector can witness rapid growth if we are able to increase returns to cattle owners by 20%."
Confederation of Indian Industries (CII)
According to the industry sources, Mother Dairy and Metro Dairy would have to shell out more for the milk powder if Centre does not extend the ban on exports. However, dairy majors with substantial milk procurement network and SMP manufacturing capacities are opposing the ban since SMP prices are shooting up in the international markets.
The Centre, through its notification dated February 9, prohibited exports of SMP till September 30. Anxiety is creeping in as the deadline nears and dairy majors and leading SMP consumers have started lobbying to safeguard their interests.
SMP marketers believe that India is losing a golden opportunity to capitalise on the buoyant international dairy market, due to draught in Australia. India exported over 16,500 tonne of SMP between April ’06 and December ’07. Egypt, Bangladesh, Thailand and Pakistan are some of the major destinations for SMP made in India.
Meanwhile, the Confederation of Indian Industries (CII) has sought opinions of the dairy majors on the export ban. It has circulated a note that supports the SMP export ban and wants the ban to be extended to other dairy products like casein and other milk-based powders. The cooperative dairy industry however, is concerned about the farmers who might fail to receive returns in accordance with international markets if the ban is extended.
“Today, dairy sector stands for about 18% of the agriculture sector, which is growing at a sluggish rate. The agriculture sector can witness rapid growth if we are able to increase returns to cattle owners by 20%.
Source: Economic Times
