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Govt lifts export ban on milk products to reduce inventory

The government has lifted a ban on the exports of milk and certain other dairy products, aimed at reducing inventory and boosting returns for farmers.

The government has lifted a ban on the exports of milk and certain other dairy products, aimed at reducing inventory and boosting returns for farmers.

The restrictions on the exports of milk and cream, concentrated or containing added sugar or other sweetening matter including whole milk powder, dairy whitener and infant milk foods have been lifted, according to a notification by the Directorate General Of Foreign Trade. “There is no change in the policy regarding export of skimmed milk powder, which continues to be free,” it added.

The lifting of ban came as the price of milk, which has a 3.24% weightage in the wholesale inflation basket, showed some signs of moderation since June after soaring by more than 10% in each of the seven months through May, according to the official data. Inflation in milk has stayed just over 6% in each of the three months through October, the data showed.

The government had banned exports of milk products in February last year to tide over a domestic shortfall that caused prices to soar. The country needs to raise its milk output by at least 5 million tonne a year to match growing demand, compared with an average annual increase of 3.2 million tonne in the last 15 years, according to an official estimate. However, the ban on exports of casein was withdrawn in April and on SMP in June this year to ease stocks.

At present, the country has as much as 1,12,000 tonne milk powder stocks. On an average, as much as 30,000 tonne milk were procured in the country in September, while sales were to the tune of only 26,000 tonne a day, resulting in a piling up of certain milk products that could not be exported due to the ban.

India, the world’s largest milk producer, produced around 127 million tonne in 2011-12. The country had exported milk powder and casein worth R500 crore in 2009-10 ? before the ban was imposed in 2010-11 ? with Japan and Europe being the key markets.

The country’s dairy industry, which is growing 10% annually, is expected to touch R5,00,000 crore by 2015, Assocham said in a recent report. As much as 40% of milk output is used in making different products, including butter, ghee, cheese, curd, paneer and ice cream. Around eight crore rural families are engaged in dairy production and rural market consumes more than a half of the total milk produced, the report said.

Industry executives said rise in feed costs, low yield due to lack of adequate fodder and the absence of adequate infrastructure such as cold storages and transparent milk-pricing system are driving up milk prices, and the ban on SMP exports won’t solve the problem.

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First published on: 24-11-2012 at 22:39 IST
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