A severe drought in New Zealand that has sent global milk prices soaring is proving to be a boon for Indian dairies, especially the co-operatives, which have seen a surge in demand for skimmed milk powder in recent months.
The Gujarat Milk Marketing Co-operative Federation, which owns the Amul brand, saw its exports rise to 4,000 tonnes since the Government lifted the ban on shipments in June last year.
“Exports of SMP are good. Currently, we have an order book of about 3,000 tonnes,” said R.S. Sodhi, Managing Director, GCMMF.
Co-operatives such as Amul and the Karnataka Milk Federation seem to have more milk powder stocks than their private counterparts. Sources at the Karnataka federation said that they had exported about 5,000 tonnes and were now expecting global prices to go up further. Global skimmed milk powder prices are hovering around $3,800-4,000 a tonne.
Smp exports
“India, which has ample milk powder stocks, can continue exporting about 10,000 tonnes a month for the next few months,” said Sodhi.
Since June last year, the total exports from the country are estimated at over 60,000 tonnes in the just-ended fiscal. These exports are largely destined to the milk-deficient South Asian countries such as Bangladesh, Sri Lanka and Pakistan.
Indian exporters are realising between Rs 170 and Rs 180 a kg for the milk powder against the Rs 140 a kg realised four months ago.
The increase in SMP exports is notwithstanding the onset of summer in North India, when milk production declines.
“Our daily milk procurement is still high by about 15 per cent over last year and such a trend is expected to continue for some more months,” said Sodhi.
Flush season
Private players such as Hatsun Agro Product Ltd and Sterling Agro Industries, who were actively exporting milk powder till a couple of months ago, have now slowed down for various reasons.
Hatsun Agro, the country’s largest exporter, has shipped over 12,000 tonnes in the last financial year. “We have to wait for at least three months for the next flush season,” said R.G. Chandramogan, Chairman and Managing Director, Hatsun, which largely operates in the South, where the flush or peak milk producing season ended some three months ago.
However, in North India, where the ongoing flush season in last phase, private dairies are focussing more on the domestic market.
“Milk powder exports are no longer viable as domestic demand is picking up,” said Kuldeep Saluja, Managing Director, Sterling Agro, makers of the Nova brand dairy products. Sterling has exported about 7,000 tonnes in 2012-13.
Sterling, which recently launched pouched liquid milk under the Nova brand in the Delhi-National Capital Region, has seen its sales touch one lakh litres a day in 1.5 months, Saluja said.
“We are aiming to sell 5 lakh litres by December 2014,” he said.