No cheers for domestic milk powder producers

The lifting of export ban on skimmed milk powder (SMP) in October has brought no major gains to domestic producers since international prices have started softening.

"Immediately after the ban was lifted, we had contracted exports at around $3,900 per tonne. However, the last shipment we made few days back fetched us only $3,400 tonne and at current dollar rates it translates into about Rs 133 per kg, marginally better than the domestic realisation", said Brijesh Gupta, vice-president of Param Dairy.

Kuldeeep Saluja's Sterling Agro Industries, which was the country's largest SMP exporter before the ban was imposed in February, has so far been able to ship only 700 tonnes.

The industry estimates that 6,000-7,000 tonnes of SMP have been shipped from India after the ban got lifted last month. "By the end of this financial year, the country is expected to ship about 50,000 tonnes of SMP," said Saluja.

"The SMP stock in the US is currently more than double of what it was a year ago and it has hit international rates. Anticipation of a further price decline is preventing the international buyers from buying large quantities," said Saluja.

Even the domestic prices that were expected to get a boost with the removal of ban have failed to bring any cheer to the producers. Domestic prices that were ruling at Rs 135 per kg in early October, have now come down to Rs 130 per kg.