India’s dairy stock
The Managing Director of Lactalis India Rahul Kumar called for government intervention. Urgent reduction of stocks of milk products is needed as the demand is low due to the COVID-19 pandemic. The proposed solution for this problem would be spending up to US$ 400 mil to subsidize the export, as well as buying buffer stocks from producers.
Currently, there is more than 200,000 MT of SMP and 80,000 MT of butter in warehouses in India. The numbers seem even higher considering the current low season of milk production. The problem arises from the fact, that this amount of tock cut the prices of SMP by 40% compared to the period before the pandemic. This has a strong influence on farmers.
With the seasonal rise in the raw material collection, the stocks are expected to grow up to 500,000 MT of SMP and 200,000 MT of butter which would have serious consequences.
One of the proposed solutions would be a subsidy for export and the other – purchasing 100,000 MT of SMP by the National Dairy Development Board (NDDB) of India. Any further delays in taking action will have a severe impact on the industry.
As the report made by Research and Markets shows, in 2018 India accounted for 19% of global dairy market share.