Skimmed milk powder (SMP) prices have firmed up in recent weeks on a demand revival due to the wedding season and a gradual rise in export demand.
A drop in the supply of liquid milk to dairy plants due to the wedding season has also impacted the production of powder and the prices.
R S Sodhi, managing director of Gujarat Milk Marketing Co-operative Federation (GMMCF), which sells milk and milk products under the Amul brand, said: “Cooperatives had accumulated high stocks and resorted to desperate sales at low prices. The situation has changed; there is a monthly demand for 8,000-10,000 tonnes SMP in the export market.”
On retail milk prices, Sodhi said these were expected to remain stable till March but should rise once summer sets in.
SMP prices had risen by Rs 10 a kg to around Rs 170 during the second half of November. “The quantum of stocks was overestimated at 125,000 tonnes but is now seen at 60,000-80,000 tonnes, the normal stock the country should have. The situation seems to be moving towards a balance, though a drop of Rs 5 a kg has been seen in the past four to five days,” said Sandeep Agarwal, director of SMC Foods, selling milk powder under the Madhusudan brand.
SMC had exported around 1,000 tonnes of SMP in the past three to four months, for Rs 155-160 a kg, almost similar to the domestic realisation. A 14-month export ban on SMP was lifted in June this year.
R G Chandramogan, chairman of Hatsun Agro, said the reliability of Indian supply was a question in the export market. Hatsun has managed to ship 5,500 tonnes of SMP in the past four months.