July 10, 2014
India to drop incentive on skimmed milk powder exports
India has decided to scrap an incentive on the export of skimmed milk powder (SMP) in order to increase local supply, as milk prices surge.
With possibility of shortage of fodder in view of deficient monsoon affecting milkproduction, the Cabinet Committee on Economic Affairs (CCEA) has decided to withdraw a 5% incentive offered to SMP exporters.
Sources said that this decision was taken at a CCEA meeting, headed by Prime Minister Narendra Modi.
In June 2012, the previous administration had lifted the ban on SMP exports and included this product under Vishesh Krishi and Gram Udyog Yojana under which exporters can avail 5% duty credit scrip on export value.
All major milk suppliers, including Amul and Mother Dairy, had raised prices of various varieties of milk by US$0.03/litre to US$0.57-0.80/kg in the national capital. A similar increase was seen in other metros.
Responding to the development, Amul''s managing director, R S Sodhi, said, "The move will not have much impact as international prices of SMP are higher than the domestic rates."
He said the country exported about 1.2 tonnes of SMP in fiscal year 2013-14 for about US$50. However, he said that the exports are low due to bullish domestic prices.
Kwality Ltd''s director, R.S Khanna, also said that the withdrawal of incentive will hardly have any impact as there are not much exports of skimmed milk powder taking place.
Milk production in India, the world''s largest producer, stood at 132 million tonnes in 2012-13.