Export of skimmed milk powder takes a hard hit

The export of skimmed milk powder from Punjab has been adversely affected, as the prices are not competitive internationally.

High input cost and subsidy of 25 per cent offered by European countries to their manufacturers, as against the five per cent export incentive offered by the Indian government, leave the Indians at a disadvantage. Resultantly, manufacturers have to either curtail the production or concentrate on other milk products.

Speaking to Business Standard, an official of the Chandigarh-based Milk Specialties Ltd said, “Last fiscal, the export was negligible owing to the price factor. In the international market, the price of skimmed milk powder from European countries varies between $2,000 and $2,100 per tonne, while our price comes to $2,300-$ 2,400 per tonne, making it unviable.”

The company has a processing capacity of 35 tonne of skimmed milk powder per day and exports to Bangladesh, Singapore and West Asia. In the fiscal 2007-08, the company exported around 300 tonne of skimmed milk powder in these countries.

Echoing similar sentiments, Tarsem Kansal, managing director, Crown Milk Specialists Ltd, said, “Last fiscal, we did not export skimmed milk powder because our product prices are on the higher side. The government should increase export incentive to 25 per cent.”

VK Singh, managing director, Milkfed, also confirmed that the export of skimmed milk powder had been hit, compelling the manufacturers to further reduce the price.

He added that last year, the price of skimmed milk powder was hovering around Rs 135 per kg. Now, due to the slowdown in demand in domestic and international markets, the price has fallen to Rs 120 per kg.