Financial Daily from THE HINDU group of publications
Tuesday, Mar 21, 2006
Financial Daily from THE HINDU group of publications Tuesday, Mar 21, 2006 |
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Agri-Biz & Commodities
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Dairy & Dairy Products Amul, NDDB back to doing business with each other Dharini Nagarajan
The sale was made at Rs 92 a kg and talks are on for further deliveries.
New Delhi , March 20 Call it coincidence or something else — the exit of Dr Verghese Kurien from chairmanship of Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) has taken place in the face of an important corporate development. For the first time in three years after the spat between GCMMF and Dr Amrita Patel-headed National Dairy Development Board (NDDB) broke out in the open, the two co-operatives are back to doing business. Just about 15 days back, GCMMF sold 2,000 tonnes of skimmed milk powder (SMP) to the NDDB-owned Mother Dairy - something unimaginable considering the animosity levels that had sprung up between the two of them in the recent period. Mr R.S. Sodhi, Chief General Manager, GCMMF, confirmed the deal to Business Line. It is reliably learnt that the sale was made at Rs 92 per kg and that negotiations are currently on for further deliveries to enable Mother Dairy stock up sufficiently for the summer to ensure liquid milk supplies in the national Capital. Industry sources say that the exit of Dr Kurien may provide a further impetus to the co-operation of the two co-operatives. In the last couple of years the two co-operatives have been carrying out a no-holds-barred battle in the market place with Mother Dairy launching butter to take on GCMMF established Amul brand. Further, GCMMF had launched Amul ice-cream in Mother Dairy's Delhi backyard, while Mother Dairy has started marketing its milk in Gujarat.
Short of stocks
Mother Dairy, which sells some 20 lakh litres a day (LLPD) in Delhi (the country's largest milk market), is currently reported to be holding hardly 800 tonnes of SMP. Last year, at this time, it had inventories of over 10,000 tonnes. The reason for shortages this year, sources noted, were two-fold. The first is the large-scale export of casein and SMP. During 2004-05, India exported Rs 400 crore worth of dairy products, including Rs 210 crore of casein. The figure is expected to double this fiscal, with the export of casein touching 15,000 tonnes and powder another 30,000 tonnes. Casein is a group name for the dominant class of proteins in milk, responsible for its viscosity and white colour. Mr Sodhi attributes the high prices of SMP to globalisation, saying that earlier prices in India were below the world trade prices and now with the opening up of the economy, prices are moving upwards equalling the global prices that are ruling above $2,200 a tonne. "It's just a matter of demand and supply," he added.
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