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Indian dairy exports are estimated at an eight-year high in FY22 on strong demand, helped by higher global prices.

Provisional data for the first eleven months, from April 2021 to February 2022, indicates that shipments have touched 1.70 lakh tons valued at more than 552 million dollars, a growth of 93% in value and 63% in volume compared to the same period a year ago. In rupee terms, exports grew to ₹4,115 crore, up 94 percent year on year over ₹2,122 crore, according to DGCIS data.

The increase in exports is driven by strong demand for basic and value-added dairy products, coupled with an increase in world prices. Trade sources said that both cooperatives and private players have seen good growth in dairy exports during the year.

Raw material exports

India, the world’s largest milk producer, had previously posted a record shipment of dairy products of $727 million in fiscal 2014, when world prices ruled higher.

RS Sodhi, CEO of the Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells Amul-branded products, said the growth is due to exports of staples such as skimmed milk powder (SMP), although branded products experienced the usual annual growth. 15-20 percent.

Amul has shipped around 35,000 tonnes of SMP during the year. The export turnover of the country’s largest cooperative during FY22 saw a 300 per cent growth at around Rs 1,450 crore compared with Rs 520 crore in the previous year.

“Rising feed costs and fertilizer shortages are seen to affect milk production in dairy-rich countries, driving demand for Indian dairy products. We were never competitive in the dairy fat segment, but now the global fat market is about 20 percent higher than India’s,” Sodhi said.

Trading sources said unfavorable weather conditions in New Zealand and Australia have affected milk production in these surplus milk countries, resulting in historically high international commodity prices. This has helped Indian entities to export products such as SMP, butter and whole milk powder, among others, to dairy deficit countries. The United States, Bangladesh, the United Arab Emirates, Saudi Arabia and Malaysia are among the largest buyers of Indian dairy products.

Average realization per tonne by Indian exporters has been $3,238 during April-February, about 19 per cent higher than $2,726 for the same period a year ago. “Global prices have been 15 to 20 percent higher than the Indian domestic market,” Sodhi said.

The sources said that Karnataka Milk Federation (KMF), the second largest dairy cooperative in the country after GCMMF, has shipped around 1,000 tonnes of SMP during the year.

Sufficient stock

Despite record exports, Indian dairy farmers still have sufficient stocks of SMP and other products. Early rains in the south may lead to an early start of the peak production season in Karnataka and Tamil Nadu, the sources said.

Current stocks of SMP in the country exceed one lakh tonne, which is enough to meet this summer’s requirements, Sodhi said.

Commenting on the export outlook for the current fiscal year, he said: “The outlook is good. This year we also have good orders. Since the Indian market is good, we are no longer betting on the export market.”

Source : The Hindu Businessline April 13th 2022