*By Ritu Khatri* *AHMEDABAD : *The major dairy industry players have welcomed the move of Gujarat Cooperative Milk Marketing Federation Limited (GCMMF) to hike the milk prices in Delhi and Gujarat over the next 3-4 years on the back of a shortage of milk production in the country.
The key dairy stocks on the Indian bourses reflected a rosy picture today on the move. Nestle India Limited (BOM:500790), Vadilal Industries Ltd (BOM:519156) and Britannia Industries Limited (BOM:500825) appreciated to 1.32%, 9.05% and 1.23% respectively on the Bombay Stock Exchange (BSE). Meanwhile Umang Dairies Ltd (BOM:500231) and Milkfood Limited (BOM:507621) rose to 3.05% and 2.55% from the previous close on the BSE. Whereas the major ice-cream player, Hindustan Unilever’s Kwality Dairy (India) Ltd (BOM:531882) dipped to 4.97 per cent from the previous close, on the BSE. India’s annual milk production is estimated at 108.5 million tonnes and the country accounts for 16 per cent of the world production. The shortfall might also drive demand for dairy imports. Dairy imports were currently limited because of import duties of as much as 40 per cent and future purchases would depend on government policy. The government, with private sector participation, needs to take steps to increase milk production. Between January 2007 and March 2010 the price of milk rose seven times in Delhi. In the past one year, prices went up from Rs 17 to Rs 22 a litre. On a year-on-year basis, the inflation in milk 21.12 per cent. Sharad Pawar, Union agriculture minister was quoted saying that there is a gap of 1.8 million tonnes (MT) between demand and the current milk supply. Concerned over the rising prices of milk, the government has removed the duty on skimmed milk powder (SMP) and other dairy products. On March 17, the Centre allowed duty-free import of up to 30,000 tonnes of milk powder and 15,000 tonnes of butter oil. Milk powder imports till now attracted 60 per cent customs duty and butter oil 30 per cent. The import was allowed because Mother Dairy and other dairies in north India were facing a crisis. Milk production in India went up from 20 million tonnes in 1960 to 106 million tonnes in 2007, so did consumption. According to Food and Agriculture Organisation (FAO), it increased from 57.7 kg per person per year in 1995 to 65.2 kg in 2005. Dairying engages 18 million people, 5.5 per cent of the national work force. Milk is the main source of income for the landless, holding 1.5 to 2 animals per household. India followed a mixed farming system. Crop residue went to livestock while it gave manure in return. The transition to a commodity specific system is underway because of increasing demand. According to FAO, this has led to more puchased inputs and less non-traded ones. Former President APJ Abdul Kalam said there was an urgent need to develop dairy technology to empower rural development and national health and nutrition. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
