Amul aims to double exports turnover this fiscal

Targets 20,000 tonnes export of SMP this year

The Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns and markets Amul brand of milk and milk products, expects to more than double its exports this fiscal. The co-operative giant hopes to clock revenues of Rs 450 crore from exports of dairy products mainly skimmed milk powder (SMP). In fact, Amul has already exported dairy products worth Rs 140-150 crore so far this year. Amul's milk products exports stood at Rs 140 crore last fiscal.

"We are eying an export turnover of Rs 400-450 crore this fiscal. Of this, around Rs 100 crore would come from other products, and the remaining would be from SMP. So far, we have exported dairy products worth Rs 140-150 crore," RS Sodhi, managing director, GCMMF. The major export market include Bangladesh, Pakistan, some South East Asian and African countries.

Amul's exports have been steadily rising in the last few years. In 2011-12, it had exported milk products worth Rs 90 crore, which rose to Rs 140 crore in 2012-13. On top of it, this year the depreciation of the Indian currency vis-a-vis the dollar has also helped on the export front. The rupee has touched 64.4 levels vis-a-vis the dollar in August 2013. Sodhi admitted that "The rupee depreciation has definitely been an advantage on the export front." He,however, did not share further details as to by how much the export margins have improved due currency fluctuations.

After the government lifted the ban on SMP exports in June last year, India had exported around 60,000 tonnes of SMP last fiscal. Sodhi said that Amul had exported around 5,000 tonnes of SMP last fiscal and this year has exported around 10,000 tonnes of SMP so far.

"We aim to export around 20,000 tonnes this fiscal," he added.

India processes about 370,000 tonnes of SMP a year. During 2012-13, owing to depressed domestic demand and good milk production, there was surplus stock.

The oversupply resulted in SMP prices falling from Rs 180-200 a kg in 2011-12 to Rs 140-150 a kg in the last few months of 2012-13. Prices, however, have firmed up now. As Sodhi informed, "Prices of SMP are around Rs 200 per kg now and the country is exporting around 10,000 tonnes of SMP per month at the moment."

Industry insiders claimed that if a government ban is not imposed, India could export around 100,000 tonnes of SMP in a year. "We do not see a government ban on exports coming anytime soon. This year we expect a good milk production as well as a surplus in the market, Sodhi said.

Multiple bans on export of milk powder from the country had hit the industry's credibility overseas, making it difficult for Indian players to secure longterm export contracts. Amul at the moment is executing three-month long export contracts.