After Onions, ice-cream and frozen desserts to cost more, here's why

Source :SIFY
Author :SIFY
Last Updated: Fri, Jan 17th, 2020, 17:47:06hrs
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After Onions, ice-cream and frozen desserts to cost more, here's why
Ahmedabad: Ice-cream and dessert lovers in 2020 could be in for a rude shock with forecasts of a tall hike.

The Indian Ice-cream Manufacturers association (IICMA) in a note has predicted cost of ice-cream to nearly double given that the cost of raw materials and a secret ingredient codenamed SMP (Skimmed Milk Powder) have sky-rocketed.

The agency in a note has outlined its fear and the market conditions. Rajesh Gandhi, President at IICMA said, "It would be great help if the import of Skimmed Milk Powder (SMP), Whole Milk Powder (WMP), Butter and butter oil (fat) would be under duty free scheme as non-availability of the stock is going to affect the whole Ice Cream and Frozen Dessert Industry of India"

Data from the commerce ministry shows imports of skimmed milk, bearing 8 digit HS code (04021010) dropping to Rs 530.98 lakhs in FY19 from Rs 1,572.07 lakhs a year ago. The drop in imports may be attributed to costs of the secret ingredient nearly doubling. Data from the associatoin shows cost of SMP increasing from an average of Rs 150 per kilo in 2018 to almost Rs 330 per kilo. The association adds that India's exit out of RCEP resulted in an increase in SMP by Rs 20 per kilo. IICMA believes the situation could worsen during the Summer season thereby implying that a scoop of ice-cream could turn into a lavish proposition.

• Also Read: Hungry for ice-creams? Try the 'Modi-Sitafal-Kulfi'!

Furthermore, delay of monsoon by two months and damage to crop and fodder had also resulted in a 10-15% reduction in procurement of milk and milk products.

Besides a demand-supply imbalance, IICMA has outlined a few fears for the industry, here are some of them:

1. Rampant adulteration in SMP.

2. Many ice-cream manufacturers may be prompted to shutdown thereby resulting in a loss of GST for the government.

3. Lesser manufacturing companies and costlier SMP could further hike cost of ice-cream. There is also a fear of joblosses arising out of factories that shut down owing to volatile supply-demand situations.

In a note, IICMA has proposed creation of a buffer stock of 65,000 MT which could be used to stabilise the domestic market and thereby maintain/reduce prices within acceptable levels. "In a period of glut when prices fall below remunerative levels, the Govt can step in to buy SMP and use buffer stock to provide stability to market to protect interest of farmers. This way the price of Milk and SMP can be maintained within an acceptable price band thereby taking care of interest of both - farmers and consumer and therefore creating a win-win situation for all stakeholders. IICMA felt that such buffer stock should be created within mid-Feb and widely published in media so that hoarding of SMP by manufacturers and traders is strongly discouraged," added IICMA in a note.

The agency further said, "IICMA therefore also requested Hon. Minister to immediately arrange import of 65000 MT of SMP which can start coming into country within 45 days approximately so that stocks would be probably available within country by mid of Feb 2020. And the ice-cream manufactures do not have to face situation like in case of onions where intervention came too late and prices already had reached very high levels before imports were organised."

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