INDIAN DAIRY FIRMS EYEING SOUTHEAST ASIA MARKET TO TAP GROWING DEMAND FOR MILK

12 Jul 2013 11:19

NEW DELHI, July 12 (Bernama) -â€" India’s dairy sector arev expecting a surge in its exports to Southeast Asia, where local entities seemed unable to satisfy the growing demand for milk, a report said.

Business Standard reported quoting industry insiders as saying that skimmed milk powder (SMP) export to the region could rise to 10,000 tonnes from the present 5,000 tonnes.

"Across Asia, India is the only country with surplus milk. Above all, we have the location advantage to cater to the Southeast Asian market.

"Also, price competitiveness is there," Gujarat Cooperative Milk Marketing Federation Managing Director, R S Sodhi, said.

The federation sells dairy products under the Amul brand.

Milk consumption in the area is mainly driven by high birth rates, rising incomes, improving diets, growth in modern retailing, urbanisation and country-wide school milk programmes.

Competition is rising among international dairy companies, with six countries in Asean -- Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- increasingly depending on imports.

Quoting a Rabobank report, the report said dairy trade flows into the region surpassed 1.6 million tonnes in 2012, equating to a US$5.5 billion export opportunity.

The region is one of the few remaining dairy battle grounds and the boom in demand has triggered intense competition among producers.

"We expect dairy consumption across the Asean-6 to grow 2.4 per cent a year through to 2020. This creates a requirement for an extra three billion litres of milk, which local players are ill-equipped to deliver," said Rabobank analyst Michael Harvey.

"We see 7,000 to 8,000 tonnes of SMP exports every month. Farmers benefit from this as we get a good price from the international market," said Sodhi.

According to sector insiders, Indian SMP costs around US$3,450 a tonne.

Competing nations such as Australia and New Zealand charge US$3,550-US$3,650 a tonne.

A stronger dollar against the rupee further benefits exporters in India, it added.

-- BERNAMA SM SM TOM