Comments
Global skimmed milk powder (SMP) prices appear to be firming, raising prospects for Indian exporters to start selling abroad if the rise is sustained over the next two months.
“SMP prices fell so far that they could only rise. We expect them to be normal by March or April of next year,” said RS Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation, which owns the brand Amul.
The last two auctions on Global Dairy Trade (GDT), a trade platform for dairy commodities, recorded upticks for the first time in five months.
The latest September 1 auction — which saw the overall dairy price index rise by 10.9 per cent — registered a 11.7 per cent increase to an average price of $1,698/tonne (₹1.13 lakh/tonne).
This figure is nearly 20 per cent higher than a month ago when average SMP prices crashed to $1,419/tonne, the lowest since prices began to go south since the March 3 auction.
“At the present increased price, SMP exports are still not viable. However, one can expect further improvement, and if it touches ₹170/kg then Indian exports will begin,” said RG Chandramogan, Managing Director, Hatsun Agro.
Data from the GDT platform showed contracts up to next March trading in positive territory, with increases of 14.3 and 9.4 per cent respectively for the November and December contracts.
“Consecutive auctions have recorded more than 10 per cent increases and if it is sustained, by December it should be viable for Indian companies to sell abroad,” said an industry official.
Industry sources pegged the current SMP inventory at 70,000-80,000 tonnes with negligible exports having taken place last year on account of low prices.
In 2013-14, however, Indian companies exported about 125 lakh tonnes when global prices were between $4,000 and $4,800/tonne.
“Prices had crashed to ₹90/kg and have since risen to around ₹110. But this is not viable since domestically it is between ₹140 and ₹150/kg. It’s difficult to say if the rise will continue, but if it does, perhaps some of the intervention stocks could be released,” said Sandeep Aggarwal, Director, SMC Foods Ltd.
No impactChandramogan said exports of SMP will have no impact on domestic milk prices, since overseas sales had never exceeded 0.6 million tonnes (mt) in any year.
This was a fraction of the estimated 140 mt of milk produced, unlike New Zealand, which exports almost 95 per cent of its dairy produce.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.