Export sops, higher consumption to help get rid of excess milk powder stocks
The New Year is set to bring smiles on the faces of dairy farmers, thanks to firm prices of the skimmed milk powder (SMP) following export incentives by the government.
Most co-operative dairies and private players were able to get rid of their excess SMP stock, which led to firming up of prices by at least Rs.20 a kg in the past fortnight.
No shortage
A section of consuming industry, however, has claimed shortage of SMP as a reason behind sudden spurt in prices. They claimed that the dairies had reduced processing due to heavy losses in SMP last year and farmers stayed away from investing in additional cattle in the flush season causing supply shortage in certain areas. SMP prices increased from Rs.195 to Rs.220 a kg in recent trades.
However, industry leaders rejected the claims stating that price rise is a fall-out of exports and increased consumption and will ultimately benefit dairies and farmers.
“Last 2-3 years, SMP prices had declined significantly from Rs.290 a kg to Rs.130-140 per kg. This resulted in losses for farmers. So, they reduced buying or investing in new cattle. But with lower prices, consumption went up and now that the exports are happening with government incentives, we see prices improve. There is no shortage,” said RS Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) — the marketer of Amul.
GCMMF has so far exported about 30,000 tonnes of SMP under the incentive scheme in past 2-3 months.
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