Dairy cooperatives seek 20% incentive for exporting milk products amid drop in demand


New Delhi: Dairy cooperatives in the country have sought a 20% export incentive for milk products, as there are ample stocks amid drop in demand from bulk consumers.

This will ensure better returns for dairy farmers, they said.

There is demand for skimmed milk powder (SMP) and white butter from Nepal, Bangladesh, the UAE, Egypt and Singapore, said RS Sodhi, MD at Gujarat Co-operative Milk Marketing Federation Ltd, popularly known as Amul.


“We have asked the government to give a 20% incentive on export of milk products to support the sector. Demand for milk products have dropped by 10% to 12% from the bulk consumers like hotels, restaurants, wedding caterers etc. This has also led to a drop in SMP prices by 40% to Rs 180 a kg in the past four months,” he said.

Dairy cooperatives in the country have a stock of more than 200,000 tonnes of SMP, which is used for preparing liquid milk in the summer when supplies are short and they could easily export 75,000 tonnes if an export subsidy was given, thereby firming domestic prices, said Ranjeetsinh Deshmukh, chairman at Mahanand Dairy.

“Due to coronavirus, SMP and white butter stocks are in excess, thereby depressing prices. The cooperatives are giving Rs 25 per litre while the private sector is giving Rs 20 a litre compared to the price of Rs 32 a litre prior to the lockdown,” said Deshmukh.

Mrityunjay Kulkarni, director-marketing at Karnataka Milk Federation, said demand by bulk consumers in the domestic market has not picked up and it was a good time to export SMP. “There is a 30% to 40% drop in demand for SMP this year due to coronavirus. An export subsidy will make us competitive in the global market,” he said.

India is the leading milk producer in the world with production close to 146.31 million tonnes. In 2019-20 , India exported 51,421.85 tonnes of milk products worth Rs 1,341.03 crore.

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