Agri Business

New Zealand looking for greater access to Indian dairy market

Vishwanath Kulkarni Bangalore | Updated on July 29, 2014

Kiwi delegation to begin talks with Indian stakeholders today

Against the backdrop of a change in Government and rising trend in milk prices, New Zealand — the world’s largest exporter of dairy products — has renewed its efforts to gain greater access to the Indian market.

Trade figures high on the agenda of the India-New Zealand Dairy Dialogue to be held in New Delhi on Wednesday. A delegation from New Zealand, consisting of officials from Fonterra Co-operative Group, the world’s largest exporter of dairy products, will discuss trade issues with Indian dairy stakeholders — both co-operatives and private players. Heads of large milk co-operatives and private companies have been invited to this dialogue.

Fonterra opened an India office last year and is looking to expand its footprint here.

The co-operative has been selling dairy ingredients to Indian customers for many years now and is seeking greater market access.

The dialogue will also discuss the current barriers to greater New Zealand trade with India. Following stiff opposition from domestic players, India has so far been reluctant to open up the market for dairy products from New Zealand.

After nine rounds of negotiations, both countries are yet to conclude a free trade agreement (FTA) owing to the failure to arrive at a consensus over dairy market access, sources said. The proposed dialogue could set the stage for the next round of FTA discussions that are likely to take place in the next few months.

“Allowing duty-free imports of dairy products under FTA is not good for the Indian farmers. We are going to resist it,” an official at a milk federation said.

India is among the fastest growing dairy markets and the rapid rise in milk prices — by 15-17 per cent over the past one year — has been a concern.

Milk production was estimated at 132.43 million tonnes in 2012-13 and was targeted to reach 139.67 mt in 2013-14.

India turned a net exporter of dairy products in 2013-14, with skimmed milk powder shipments of over 1.22 lakh tonnes. Total value of dairy product shipments were estimated at over ₹3,318 crore. But with the decline in global prices on improved supplies, exports of SMP from India are currently seen as unviable.

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Published on July 29, 2014
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