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The country’s milk production is expected to surpass the 180-million tonne mark in the current financial year mainly on account of various export-linked benefits by the government, according to a report.
“The country is entering its seasonal peak milk production period, which will last for three to four months and cover different regions. We will see an increase in domestic milk supplies, which in turn will lead to additional Symmetric Multi-Processor (SMP) manufacturing and stocking,” Rabo Bank said in its ‘Dairy Quarterly Q4 2018’ report.
The government has increased export subsidies to 20 per cent to ship surplus SMP and in addition, State-sponsored export-linked benefits by Gujarat and Maharashtra, and a minimum support price for raw milk to farmers in Maharashtra are also in play, Rabo Bank report said.
These benefits are likely to be extended through March 2019, it added.
Exports surge
Talking about exports, the report noted that for the first half of 2018-19, India exported 9,600 tonnes, compared to 4,750 tonnes in the same period last year. In September alone, exports were at 6,150 tonnes, it added.
SMP exports are expected to surpass 20,000 tonnes by December 2018 (from April). The industry estimated that India will export 35,000-40,000 tonne of SMP by March 2019.
Meanwhile, it said, SMP and raw milk prices have remained unchanged over the last quarter and are also not expected to move much in the next quarter.
Global scenario
Globally, the third quarter growth sunk to just 0.8 per cent year-on-year and indicative the fourth quarter showed a similarly modest growth rate.
Australian milk flows were affected and stalled European growth due to weather conditions on feed quality, quantity and cost across the second half of 2018.
The US looked set to see the lowest year-on-year growth since 2013, Rabo Bank said, adding that New Zealand remained number one setting new milk collection records for peak milk flows in October. Meanwhile, China is expected to increase its dairy product imports by double digits for 2019, it added.
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