MUMBAI Aug 7 India, the world's biggest milk
producer, hopes to seize on a New Zealand dairy product
contamination scare to increase its exports and add market share
in China and other emerging Asian countries.
India's milk production is likely to rise almost 5 percent
in the year to next March to 133 million tonnes, said R G
Chandramogan, managing director of Hatsun Agro Products Ltd
, one of the country's leading milk powder exporters.
Traditionally, most of that production stays at home as a
protein staple for a population of 1.2 billion, but with
domestic demand pegged at around 128 million tonnes, there
should be more milk available to make skimmed milk powder (SMP)
for export. The Indian government also usually restricts
overseas sales to keep a lid on local prices.
But, with more milk powder, a weaker rupee currency
and Chinese restrictions on using some New Zealand products in
the wake of Fonterra's whey powder concentrate
contamination scare, India expects its SMP
exports to jump by more than half to 100,000 tonnes this year,
said R.S. Sodhi, managing director of Gujarat Cooperative Milk
Marketing Federation Ltd (GCMMF), India's top milk product
exporter and owner of Amul, the nation's best-known milk and
dairy products brand.
Referring to New Zealand's food safety issue, Sodhi said:
"We don't have such a problem. This is a very good opportunity
for India. Definitely our exports will rise this year."
Amul branded products won't be appearing in Chinese
supermarkets just yet - Indian supplies will go to milk product
makers who then use their own packaging. GCMMF expects to ship
25,000 tonnes of SMP this year - five times last year's levels.
"This year there is no (export) restriction and market
conditions are better," said Sodhi.
Nearly 90 percent of China's $1.9 billion in milk powder
imports last year originated in New Zealand. India's milk
product exports are tiny in comparison - just $230 million last
year, mainly to south Asian countries and the Middle East. India
only felt comfortable enough with its domestic supplies to lift
an SMP export ban in June 2012.
"We are heading towards the flush season, so there will be
more milk available for SMP. We are getting good export orders
for SMP," said Vinayak Patil, chairman of the Maharashtra State
Cooperative Milk Federation. August marks the start of a 2-3
month peak milk production season in some Indian states.
Rising export prices are also boosting sales, especially
with the rupee's weakness. The currency hit a record low of
61.80 to the dollar on Tuesday, and has lost a tenth of its
value so far this year.
"SMP prices have risen more than 15 percent in six months in
dollar terms," said an official at a Delhi-based co-operative
dairy. "With the rupee depreciation," he added, "SMP exports are
now lucrative for dairies."
($1 = 61.4475 Indian rupees)
(Editing by Ian Geoghegan)