July 1, 2004

India Aims To Double Dairy Exports In 2004-05

Spurred by the recent reduction in dairy subsidies by the European Commission and stagnant milk output in the US and Europe, and aided by low-cost production in India, the Gujarat Cooperative Milk Marketing Federation (GCMMF) has set itself its single biggest export target ever. It has projected doubling of exports in 2004-05 from last fiscal, amounting to Rs 90 crore.

"With the EU subsidy cut, low-cost imports from Europe and other markets will dip. This will increase the Indian dairy sector's competitiveness globally," says RS Sodhi, GM, marketing, GCMMF.

The subsidy cut will also help Indian exporters achieve higher realisations from the EU, and subsequently better returns for farmers.

The reductions are primarily on butter oil, skimmed milk powder (SMP) and white butter.

Top on GCMMF's export list are SMP in bulk, UHT milk in tetrapaks, butter, cheese, ice-cream, ghee (or clarified butter), paneer (cottage cheese) and desserts.

All these are being exported under the Amul umbrella brand. Bulk exports of SMP have the highest growth potential.

Among branded products, Amul is pitching its UHT milk - branded Amul Long Life-upfront. "We expect to sell Rs 20 crore of UHT milk in 1-litre tetrapaks in overseas markets this fiscal," says Sodhi.

Branded consumer products are being targeted at NRIs. Last year, Amul initiated a potential foray in Wal-Mart for some of its milk-based products.

In 2003-04, GCMMF's sales grew 5 per cent to Rs 2,882 crore, with dairy business growing 18 per cent despite the loss of its edible oils business.

Milk production in India - at 86 million tonnes, making it the largest milk producing country - is growing at 4-5 per cent.

Output in the US, the second largest, is estimated at close to 72 million tonnes.