Prices of milk powder up 4% since Feb

The prices of skimmed milk powder (SMP) have gone up by about 4 per cent since February, when the government imposed a ban on its export to check the rising prices.

Though immediately after the ban, SMP prices fell from Rs 125 a kg to Rs 105 a kg, they are currently ruling at Rs 130, and are likely to break the last year's record of Rs 140.

According to industry sources, the government's decision to ban export of SMP while allowing shipment of casein (a protein) has rendered the ban irrelevant. "Milk is going out of the country in the form of casein, and prices will go up further if casein export is not banned," said Kuldeep Saluja, managing director of Sterling Agro Industries that exported 10,000 tonne SMP last year. According to industry estimates, casein worth Rs 280 crore was exported in 2005-06.

"Had the government banned casein export with the SMP, it would have affected the domestic SMP prices. At present, casein producers are exporting an average 35 lakh litre daily," said Vipin Gupta, managing director of Karnal Milk Foods.

The prices of SMP went up by about 47 per cent over the last one year to Rs 125 a kg from Rs 85. In February, the Centre banned exports of SMP to contain inflation. The ban will be in place till September this year. "The demand for SMP is high while the supply is limited," said Brijesh Gupta, vice-president of Param Dairy, an SMP producer and exporter.

The country has exported an estimated 65,000 tonne of SMP in 2006-07 compared with 50,510 tonne in 2005-06 and 28,200 tonne in 2004-05. Export realisations on SMP were about Rs 5-6 a kg higher than the domestic sales.

Meanwhile, prices of ghee (clarified butter) also have also risen from Rs 2,150 a tin (of 15 kg) to Rs 2,300 since February.