Stock advisory Company, Milk procurement hit, prices to dairy farmers drop 20%
A private dairy based in the NCR said the market was flush with SMP and prices had fallen to Rs 150 a kg or so in the domestic market, down by 30 percent
With stocks of skimmed milk powder (SMP) expected to touch 200,000 tonnes by March, there is a problem of plenty in the Indian dairy scene.
Cooperatives are already flush with 20 percent more milk this season but capacities to convert this into SMP are stretched. The result is that procurement prices to farmers have already dropped by 20 percent on an average.
Milk cooperatives have requested the government to buy SMP (as buffer stocking) or announce an export subsidy (as international commodity prices are not conducive for exports). If not handled well, it would affect milk production next season. The SMP stock in the country is estimated at Rs 16-20 billion.
RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), said, “We have asked for either export subsidy or the government to do buffer stocking of at least 20,000-30,000 tonnes of SMP to ease out the situation.
This stock can be released during summer months (which is the lean season for procurement).”
Cooperatives account for 40-60 percent of the milk procured by the organized sector.
In Rajasthan and Madhya Pradesh, cooperatives are getting 30 percent more milk than the normal winter season. Sodhi said private players have completely stopped procuring, as they do not think it is commercially viable. Ghee prices have fallen to Rs 100 a tonne over the past month.
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