All dairies supported dairy farmers during the lockdown period even with lower demand of milk and milk products in the market. The excess milk was converted into SMP and butter. This created huge surplus of SMP and butter with most of the dairies in the country.
Amul is the largest milk handling organization in the country. During lockdown period Amul also converted excess milk into SMP. Today the largest cooperative has got around 80000 MT of SMP stocks.
Amul has requested to get an export subsidy of Rs 160 Crores from state government. This would help Amul clear its stock in International market where the price of SMP is around 185 per Kgs.
The SMP prices have toppled down from Rs 340 per kgs to as low as Rs 170 per Kg recently. In a similar situation the state government supported the cooperative with an export subsidy in 2018-19.
In 2018-19, Amul was having a stock of around 1,10000 MT of SMP. The international prices were lower and in that scenario, the milk federation would have faced losses . The government at that time thus, decided to give GCMMF a subsidy of Rs 50 per kg for the export of milk powder for six months starting July 1,2018. The state government put an upper limit of Rs 300 Crore for the subsidy.