The Hindu Business Line : Milk powder exports banned

Advertisement

New Delhi Feb 1 The Centre on Thursday announced a ban on milk powder exports till September 30. The ban covers skimmed, whole and all other types of milk powder, but not casein, an official spokesperson clarified.

The decision, taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) here, follows similar clampdowns on shipments of sugar and pulses, as part of the Centre's efforts to curtail inflationary pressures in primary commodities.

"The ban is applicable for most of the lean season (when milk production falls with the onset of summer) and we will review it in end-September," the Union Finance Minister, Mr P. Chidambaram, told presspersons. The ban has been enforced taking into consideration the overall domestic milk situation and the need to observe "caution and prudence", he added.

Attractive prices

Skimmed milk powder (SMP) prices in Delhi are currently ruling at around Rs 120 a kg, compared to Rs 90 a kg at this time last year. The increase is in line with international prices, with SMP of Western Europe origin quoting now at $3,050-3,200 per tonne free-on-board, up from last year's level of $2,100-2,250 per tonne.

High global prices — the main triggers for which have been drought in Australia and lower-than-projected milk volumes in New Zealand, coupled with phased reduction of subsidies by the European Union — have made exports attractive for dairies. Shipments of SMP and whole milk powder (WMP) touched 50,501 tonnes valued at over Rs 500 crore in 2005-06.

Exports this year have been lower, but with the window still open, domestic SMP rates have aligned themselves upwards to international levels.

While this has benefited the dairy industry and farmers, it has, however, hit liquid milk supplies to urban consumers.

According to officials, average milk procurement by cooperatives during October-December 2006, at 230 lakh kg per day (lkpd), has been lower than the 231 lkpd of October-December 2005.

On the other hand, liquid milk sales have gone up from 167 lakh litres per day (llpd) to 181 llpd for this period.

The shortage has forced cooperative federations and the Delhi-based Mother Dairy to hike milk prices by Re 1 per litre.

Mr Chidambaram said as importing powder at present rates to meet the demand-supply gap was not possible, the Government had no option but to ban exports for a limited period covering the lean season.

The major shippers of powder during 2005-06 included the Delhi-based Sterling Agro Industries (10,000 tonnes) and VRS Foods (4,000 tonnes), Gujarat Cooperative Milk Marketing Federation (7,000-8,000 tonnes) and Hatsun Agro Product, Chennai (6,000-7,000 tonnes). The closing of the export window may bring down domestic powder prices and help companies such as Mother Dairy to tide over a potential milk crisis in the months ahead.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
BPOs can trim costs by 30%: Nasscom study

Automobile sales on a roll in January

Hardening rates are here to stay

CCEA okays new urea pricing policy

Ambiguities in UAE, India tax pact to go

Fall in Tata Steel shares may tell on equity funds

Tata Steel acquires 21.1% in Corus

Volvo cars on Indian roads this year

Milk powder exports banned

Cabinet okays Govt buying SBI stake

IOB powered by performance

Indian Hotels: Fundamentals at play

Way cleared for sharing sports live feed with DD