Ripples Advisory, Higher global prices set to help dairy companies' revenue
However, it is the other way round for SMP, the most popular dairy product in the export segment
A rise in the price of value-added products such as cheese, butter and skimmed milk powder (SMP) is set to help dairy companies’ revenue via higher export in the next two quarters.
Data compiled by the Food and Agricultural Organisation of the United Nations show its Dairy Price Index at 215.2 points in May, up 11 points (5.5 percent) from April and the fourth month in a row for the index rising, primarily due to tight supplies from New Zealand. The index value was 11.5 percent higher than in May 2017, though 22 percent below the peak in February 2014.
While prices of dairy products remained almost stagnant in India, these "have surged in the international markets of late, due to lower supply. Indian companies can boost shipments to fetch better realization”, says R S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation, producer of the Amul brand.
White butter, for example, is Rs 250 a kg here and Rs 380-390 a kg ($5,850 a tonne) in international markets). Cheese prices abroad are quoted at $6,800 a tonne (Rs 457 a kg), compared to less than Rs 400 a kg in India.
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