Farm ministry keen on milk, egg futures

The ministry of agriculture is keen on introduction of futures trading in skimmed milk powder, khoya ( raw milk fat), eggs, maize and soya bean meal at the earliest.

Ministry is in talks with the national commodity exchanges to step up their efforts and introduce derivatives contracts in these commodities at the earliest. Exchange sources said that they will soon start working on the modalities of the contract and other specifications.

India is the second largest milk producer in the world and also one of the top milk consumers. The annual value of India's milk production amounts to about Rs 850 billion.

India's milk production increased from 21.2 million tonnes in 1968 to 84.6 million tonnes in 2001-02. Per capita availability of milk presently is 226 grams per day, up from 112 grams per day in 1968-69.

India has been recording 4 per cent annual growth of milk production. In 2002-03, average daily cooperative milk marketing stood at 137.29 lakh litres.

Dairy cooperatives now market milk in about 200 class cities including metros and some 550 smaller towns.

In India milk travels as far as 2,200km to deficit areas, carried by rail and road milk tankers. Under the Perspective 2010 plan, NDDB has envisaged increase liquid milk procurement by cooperatives to 33 per cent (to 488 lakh kilograms per day) of the marketable surplus in Operation Flood areas, constituting 80 per cent of the national milk produced.

India's egg consumption is 31 billion with per capita consumption of three eggs per year. The National Egg Co-ordination Committee (NECC) is working to increase consumption. Additionally, the government is also a bulk buyer of eggs in the country for its various meal programmes.

Maize is the basic feed material for poultry sector and the price of egg is heavily dependent on corn.

Futures trading in maize will help the poultry sector hedge raw material costs besides hedging price fluctuation in eggs.