NEW DELHI: Prices of skimmed milk powder, a key constituent in the milk and dairy products industry, have come down significantly globally and in India due to surplus supplies and lower offtake during the past two months.
In India, SMP prices have declined to Rs 232-240 per kg, although they are still higher than international rates of Rs 158-160 a kg.
While cooperatives and private dairy players say prices of milk and milk products will remain stable over the next six months, a segment of the industry wants the government to allow SMP imports to cool high prices of milk and its products and reduce the gap with overseas rates.
The National Dairy Development Board is the only entity in the country that is allowed to import SMP, an extract of milk that is used to boost production during the lean season.
“There is huge stock in the country with export of milk powder closed. Prices will further come down in next few months by Rs 10-120 a kg. There is unlikely to be any increase in prices of milk and milk products for the next six months,” said RS Sodhi, Managing Director of Gujarat Co-operative Milk Marketing Federation, which markets the Amul brand of dairy products.
Mother Dairy, which sells about 3.5 million litres of milk a day in Delhi, Mumbai, Hyderabad and the Saurashtra region of Gujarat, also expects prices to stabilise.
“From a high of Rs 280-290 early this year, prices have corrected. The country has adequate milk powder stock of 20,000-30,000 tonnes and with the flush season to begin, prices will fall,” said S Nagarajan, MD of Mother Dairy. The flush season runs from October to March, when milk production increases across the country.
The price of skimmed milk powder in the global market has eased to $2,600 a tonne from a year-high level of $4,693 in January.
“These prices are the lowest in two years. Despite good rainy season, inflation under control and improvement in Indian currency rates, the SMP rate in India is still very high compared to international market.
The government should allow imports of SMP into the country to cool high prices of milk,” said an industrialist manufacturing dairy products.
He said high prices paid to farmers, feed costs, low milk yields and high operational costs were preventing a drop in prices.
Milk prices have increased over the past few years, burdening consumers. In the previous year, milk prices rose 17%.
“We are looking at below Rs 200 a kg for SMP, which will be below the past two years’ price. This will ensure that ice-cream price rise in the next season will be avoided,” said Rajesh Gandhi, MD of icecream manufacturer Vadilal Industries. Most companies increased icecream prices by 8-10% across the country this year anticipating a belownormal monsoon.
Source : economictimes.indiatimes.com