March 14, 2014

 

India's dairy exports to hit record high this year

 

 

With shipments of skimmed milk powder (SMP) doubling over last year, India's dairy exports during the current financial year are set to touch a new high.

 

The demand for Indian SMP has risen mainly from the developing markets due to drought in New Zealand in early last year.

 

Till February-end this fiscal, SMP shipments stood at 1.22 lakh tonnes, nearly twice the 63,762 tonnes exported during the same time a year ago, official sources said.

 

However, due to the recent decline in global prices and the rupee appreciating against the dollar, shipments have now slowed down, with Indian SMP turning unviable in the export market.

 

"The domestic market is better now, as prices have moved up. We are getting a price of INR280-290 (US$4.55) a kilogramme in the local market, against export realisations of about INR260 (US$4.22) a kilogramme," said RS Sodhi, Managing Director of Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns the Amul brand.

 

GCMMF has seen a five-fold rise in its SMP shipments in the current financial year, with exports of 20,000 tonnes in the current financial year, the highest so far, Sodhi said.

 

In the last financial year, Amul shipped out about 4,000 tonnes, after the Government opened up SMP exports in June 2012.

 

GCMMF, which initially targeted an export turnover of INR350 crore (US$57 million) for the current year, expects to close this fiscal with revenue of INR500 crore (US$81 million) from overseas, Sodhi added.

 

RS Khanna, an expert in the sector, feels the value of Indian dairy exports for the current financial year could touch INR5,000 crore (US$812 million). This has been driven by a strong growth in shipments of SMP and improved prices.

 

Besides, demand from traditional markets, such as Bangladesh and Sri Lanka, Indian shipments also got a boost from the product contamination scare faced by Fonterra, the world's largest exporter.

 

According to Agricultural and Processed Food Products Export Development Authority (APEDA), exports of dairy products during April-December stood at INR2,618.72 crore (US$425.5 million), up 162% over INR996.86 crore (US$162 million) a year ago.