Gargi Parsai

The ban order has been enforced to stem domestic shortage

NEW DELHI: Concerned at the rising price of milk fuelling inflation, the Centre on Thursday banned the export of milk powder till September 30.

The ban is expected to stem the domestic shortage of skimmed milk powder, augment the availability of milk and prevent scarcity during the coming summer months.

Skimmed milk is converted into liquefied milk during the lean season. Prices rose in the domestic market by Re. 1 to Rs. 2 a kg last month and were revised twice last year.

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh, took the decision on a proposal of the Department of Animal Husbandry and Dairying.

Announcing it, Union Finance Minister P. Chidambaram said the prices of skimmed milk powder and milk powder had hardened in the international market. There had been no imports of skimmed milk powder for that reason. The ban would be reviewed in September.

Top milk producer

Despite India being among the top milk producers (97.1 million tonnes last year), it is facing shortage of skimmed milk powder as large quantities are being exported. From 4,185 tonnes in 2003-2004, the export rose to 50,501 tonnes in 2005-2006.

According to Ministry sources, last year there was unprecedented shortage of liquid milk in the U.S., Australia, New Zealand and European countries. The international prices of skimmed milk powder ruled at an all-time high of $2,500 to $3,000 a tonne (Rs. 112 to Rs. 145 a kg) during January 2007. Consequently, the price of skimmed milk in the country rose from Rs. 91 a kg in January 2006 to Rs. 125 to Rs. 135 a kg in January 2007 and resulted in a drop in the availability of liquid milk.

Cooperative federations too reported difficulty in procuring milk, as huge quantities were cornered by private and unorganised sectors for making milk powder.

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