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India Lifts Dairy Export Ban

03 December 2012
USDA

INDIA - The Indian Government has lifted its ban on the export of milk and cream, concentrated and/or sweetened milk and cream, whole milk powder, dairy whitener and infant milk foods.

On Nov 21, 2012, the Government of India revised its tariff rate quota on skim milk powder to permit imports up to 10,000 MT at a 15 per cent tariff rate. Post believes these actions will have little effect on trade

On Again Off Again Dairy Imports and Exports

Dairy exports were embargoed on February 18, 2011 in response to the Government of India’s concerns over domestic food inflation pressures. By June 2012, SMP stocks had grown, driving down prices and causing some local milk processors to threaten to stop procuring milk. As a result, the embargo was partially lifted on June 8, 2012, allowing the export of SMP.

Despite opening the market for SMP and casein, exporters report they were unable to sell significant volumes due to price constraints and buyers’ lack of confidence in India as a reliable supplier.

Recognising that stocks remain high at the beginning of India’s flush production season, the export embargo was completely lifted on November 1 (allowing whole milk powder, etc. for export).

Given that India exports little whole milk powder and that importers are hesitant to buy from India, the export policy change appears to be of little consequence.

India’s dairy import policy, like exports, changes frequently to adapt to market conditions and local political scenarios. In the case of SMP imports, the Indian Government varies the quantity allowed under India’s TRQ and has dropped the duty to zero when domestic production was insufficient.

Dairy Producers Face Distribution Challenges

Strong producer prices and government incentives have helped increase Indian milk production and have attracted new investment to dairy processing. Despite strong investment and growing procurement, India still faces fluid milk distribution challenges (with the exception of some Indian dairy cooperatives).

Given that demand growth is being driven by the fluid milk category, one of the most important challenges in India is delivering fluid milk to consumers at a competitive rate.

Industry sources indicate that with an unstable export market and a highly competitive informal sector, new entrants to the dairy industry are challenged to find a remunerative market for their efforts.

As a result, processors are producing increasing quantities of SMP as they struggle to serve the fluid milk market.

TheCattleSite News Desk



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