Tuesday, July 29, 2014
 India Dairy Firms Upbeat on Milk Powder Exports  

After the government had lifted the ban on export of milk powder in June last year, India exported about 60,000 tons of SMP. Industry sources said if there was no cap, the country could export about 100,000 tons a year.

In the last five years, SMP export had been banned twice.

India processes about 370,000 tons of SMP a year. This year, owing to depressed domestic demand and good milk production, there is surplus stock. The oversupply resulted in SMP prices falling from Rs 180-200 a kg in 2011-12 to Rs 140-150 a kg in the last few months of 2012-13.

In the last nine months, private dairy products company Hatsun Agro Products has exported about 12,000 tons of SMP. R G Chandramogan, the company's chairman and managing director, says, "After the government allowed exports, it took around three months for players to secure contracts, and the bulk of the exporting took place in the last six months. We have also sold about 6,000 tons of SMP in the domestic market." He added SMP accounted for only about 15-20% of Hatsun's net sales.

Currently, prices of Indian SMP range from $2,800 to $3,200 a ton in the international market, against $2,600-2,700 a ton three to four months ago. Pakistan, Bangladesh, Egypt, Afghanistan and some Southeast Asian countries are the major buyers of Indian SMP. SMP from New Zealand and Australia, two major exporters, costs $3,500-3,600 a ton, against $3,400 per ton in November 2012.

"Exports have gained momentum due to the drought-like situation in some parts of New Zealand and Australia," said R S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation, which owns and markets the Amul brand of milk and milk products. Since June 2012, Amul has exported 6,000-7,000 tons of SMP.

Delhi-based Sterling Agro Industries has exported about 8,000 tons of SMP. Managing Director Kuldeep Saluja expects exports would touch 9,000 tons by the end of this month.

While Parag Milk Foods, which sells products under the Gowardhan brand, has exported 400-600 tons in the last nine months, Bhole Baba (which sells milk powder under the Krishna brand) has exported 500-600 tons.

Saluja said, "Demand is likely to pick up in the domestic market around Holi. Milk production would also drop during summers. In the last two weeks, prices have already risen from Rs 145-150 per kg to about Rs 160 a kg."

Sandeep Aggarwal, director of SMC Foods, said, "We expect prices to touch Rs 180 a kg during the summer months, when there would be more demand from ice cream makers." Creamy Foods, an SMC group company that manufactures pure ghee, SMP, white melted butter and processed liquid milk, has exported about 1,000 tons of SMP since June 2012. Aggarwal said if exports continued to be allowed, the company could export about 1,500 tons in the next financial year.

Dairy product companies are, however, cautious in their optimism, as multiple bans on exports in the last five years had hit India's reputation of a major exporter of milk powder. Aggarwal said, "Indian players are unable to secure long-term contracts, as buyers are apprehensive about a ban being reinforced." Chandramogan said if another ban was enforced, the market created in the last few months would be hit.

Source: Business-Standard
 


Posted on Tuesday, March 19, 2013 (Archive on Tuesday, March 26, 2013)
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