Milk powder to drive dairy exports to record this fiscal

Dairy exports during the current financial year are set to touch a new high, with shipments of skimmed milk powder (SMP) doubling over last year.

A drought in New Zealand early last year had fuelled demand for Indian SMP, mainly from the developing markets.

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

“The domestic market is better now, as prices have moved up. We are getting a price of ₹280-290 a kg in the local market, against export realisations of about ₹260 a kg,” 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 ₹350 crore for the current year, expects to close this fiscal with revenue of ₹500 crore 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 ₹5,000 crore. 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 APEDA, exports of dairy products during April-December stood at ₹2,618.72 crore, up 162 per cent over ₹996.86 crore a year ago.

“The party is over for the Indian SMP exports. The surplus stocks that were built up in the past couple of years have been exhausted and the domestic prices are attractive,” said Sandeep Agarwal, Director at SMC Foods, which exported about 1,000 tonnes in the current year.