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    Thursday , May 05, 2016

   Low prices make dairy export to Russia unviable

   Publication: Business Standard , Journalist:Dilip Kumar Jha
   Edition: Delhi/Mumbai , Page No: 18 , Location: Middle-Left , Size(sq.cms): 441
  

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Low prices make dairy export to Russia unviable
DILIP KUMAR JHA
Mumbai, 4 May
India is unlikely to gain from the opening of Russian mar­kets for hard cheese export due to price fall in interna­tional markets. As against the current Rs35O a kg in Indian markets, skimmed milk pow­der (SMP) is quoted at Rs180 a kg in international markets, including Russia. Hard cheese is being quoted in Indian mar­kets at around Rs400 a kg and Rs200 a kg abroad. Butter is $5,000 a tonne here and less than $3,000 elsewhere.
This slump in global prices, by about 50 per cent, has tak­en place in the 16 months since Russian president Vladimir Putin announced the opening of his country's mar­ket for Indian dairy products. However, global dairy markets seem to have begun a recovery and Indian dairy exporters could see an opportunity in the future, says R S Sodhi, chairman, Gujarat Co-opera­tive Milk Marketing Federation, producer of the Amul brand of dairy products.
Amul has, sensing a coming opportunity in Russia, trebled its cheese production capacity to 120,000 tonnes a day from the earlier 40,000 tonnes per day, for an investment of Rs600 crore. With its aggressive pric­ing, it has 96 per cent of the Indian butter market.
The Union commerce min-
N-Ajay..05.05 - 0013-1.jpg
istry had signed the protocol, mandatory procedural require­ment to commence exports to Russia, on April 28. GCMMF has initiated talks with a cou­ple of Russian cheese importers for future deals.
However, despite the reports of unviable prices, Govardhan brand dairy prod­ucts producer Parag Milk Foods aims to dispatch a first consignment of hard cheese to Russia by the end of June.
"We have lined up a num­ber of Russian buyers for hard cheese export. We were waiting for the government to sign the protocol to finalise the terms of trade with Russian buyers. Since the protocol has been signed by India, we expect the Russian government to recip­rocate in two weeks. We would start negotiating terms of trade
after that," said Devendra Shah, managing director at Parag.
Rosselkhoznadzor, the Russain regulatory agency, had initially approved only Indian farms with at least 1,000 cattle underowner-ship. Only Parag and Schreiber Dynamix met these norms. Most large dairy farms in India, includ­ing GCMMF, operate under the co-operative model in which farmers remain the owner of cattle.
The government sought relaxation in this norm and Russia eventually agreed. According to Shirish Upadhyay, senior vice-presi­dent at Parag, the new Russian rules focus on sourcing of milk instead of number of cattle, to accommodate more exporters from India.
 
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Low prices make dairy export to Russia unviable
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Date: Thursday , May 05, 2016
Publication: Business Standard, Journalist: Dilip Kumar Jha
Edition: Delhi/Mumbai, Page No: 18, Location: Middle-Left, Size(sq.cms): 441