No hike in ice-cream prices as input costs fall

hmedabad: This summer will be cooler for ice-cream lovers as their favourite scoops are unlikely to get more expensive. With raw material costs remaining low and higher demand anticipated, top ice-cream makers in the state will refrain from hiking prices this summer.

"There is no price revision in end products. Generally, ice-cream prices increase before summer but this season, after many years, we are not going for any hike," said Rajesh Gandhi, managing director of Vadilal Industries Ltd.

Prices of skimmed milk powder (SPM), a key raw material for ice-cream, have come down substantially, offering ice-cream makers room to keep retail prices unchanged.

"The world over, commodities prices have eased. SMP price has declined to Rs 140 per kg from Rs 225 last year," said R S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation (GCMMF), which markets milk products under the Amul brand.

Other ingredients such as milk cream, fat, sugar and dry fruits have become a bit costlier. "Although the prices of these commodities have increased, they are still lower than price levels seen two years ago. Last year retail prices had to be increased to offset higher costs," said Ankit Chona, MD, Havmor Ice Cream Ltd.


There were also expectations that the excise duty on ice-cream would be raised in the budget. However, that has not happened, providing a cushion to the ice-cream industry. "There may be a price cut in select ice-cream products," Chona added.

Industry players estimate dem'and to grow by 15-20% in 2016-17. All three major ice-cream players have seen a good start to the summer with spurts in sales and they anticipate sales to grow by 20-25% this year.


As competition is set to heat up, Amul, Vadilal and Havmor have decided to launch new flaours and step up their marketing spend to grab a bigger chunk of the Rs 4,000 crore organized ice-cream market in the country. Gujarat accounts for 20% of India's ice-cream market. The major focus this year is on the premium and kids segments.

Resource: http://timesofindia.indiatimes.com/city/ahmedabad/No-hike-in-ice-cream-prices-as-input-costs-fall/articleshow/51421839.cms

Skimmed milk prices firm up in international market

As skimmed milk powder (SMP) prices firm up in GlobalDairy Trade auctions mid-August, after five months of consecutive falls, it opens up opportunities for Indian exporters to look at international markets in the medium term.

India has hardly exported any SMP consignments this year owing to low prices in the global market, which, in turn, has also kept the domestic liquid milk prices in check. Firming up of prices in the international circuit could help reduce the 30,000 tonnes of SMP inventory lying in the country and eventually put pressure on retail milk prices here, feel players.

In the August 18 auction at GDT (Global Dairy Trade), which is an auction platform for internationally traded commodity dairy products, the prices of SMP have gone up by 8.5 per cent compared to the previous event, taking the average price to $1,521 per tonne. As such the GDT Price Index, a weighted average of percentage changes in prices, increased by 14.8 per cent in the August 18 auction, with the average selling price of $1,974 per tonne. Auctions for dairy products, including SMP, whole-milk powder (WMP), butter, butter milk powder, anhydrous milk fat, etc., are held twice a month.

R G Chandramogan, managing director of Tamil Nadu-based Hatsun Agro, a leading private dairy player in the region, felt that with this rise in international prices, the sentiments are likely to improve.

"While exports are not expected to pick up immediately, however, over the next two to three months, they are set to rise. Prices are around Rs 170 a kg now, and exporters would be very bullish once they cross the Rs 200-210 per kg mark," he said. Chandramogan added that Indian exports around 80,000 tonnes of SMP per year, and last year the country exported next to nothing.

Most of the SMP was re-converted to liquid milk, which helped with the supply situation in the domestic market.

With prices now on the rise, exporters would eye the international market. This coupled with the draught-like situation in Maharashtra, and the lean season setting in states such as Tamil Nadu, Karnataka and Maharashtra, affecting the availability of milk, is set to put pressure on domestic prices. As Chandramogan explained, "Milk procurement is already down 20 per cent in the cow belt, compared to the peak season."

R S Sodhi, managing director of the country's largest dairy cooperative Gujarat Cooperative Milk Marketing Federation (GCMMF), however, pointed out that it would take a while before the exporters are upbeat on international prices. "We are exporting to some of our international customers who insist for our products at around $3,400 per tonne. But, in terms of volumes, this is hardly more than a few hundred tonnes." He, however, highlighted that with winters (flush season for milk) approaching, this year might not see a lot of price increases in the domestic market. "The situation would be tough next summer," Sodhi said, adding growth in procurement is lower at 4-5 per cent this year in Gujarat, compared to a 14-15 per cent growth earlier. GCMMF procures 15 million litres per day across India.

GCMMF had exported around 20,000 tonnes of SMP in 2013-14, when the prices in the international circuit were high. It raised prices in June this year after a long hiatus of 13 months owing to increase in input costs. Unorganised milk players had raised prices in Mumbai city around April, followed by Mahanand and Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd (which sells milk and milk products under the Gokul brand) raising prices in May on account of pressure from the retailer lobby.

Resource:http://www.business-standard.com/article/markets/skimmed-milk-prices-firm-up-in-international-market-115082200581_1.html

Aavin to sell skimmed milk powder

Chennai: From Tuesday, Aavin will sell skimmed milk powder in retail. This follows the milk federation generating more than 75 tonnes of milk powder every day. "The federation, after distributing milk and also using it for producing milk-based products, is left with more than 75 tonnes of milk powder each day," said an Aavin official. With milk available in abundance after the procurement price being increased last year, there is plenty of milk powder stock available . Aavin said the powder will be available at 160 per 500g.

Resource : http://timesofindia.indiatimes.com/city/chennai/Aavin-to-sell-skimmed-milk-powder/articleshow/49993575.cms

Cattle economics: When milk turns sour for parched and singed Marathwada

Kantilal Bhosale has no idea that skim milk powder (SMP) prices at the New Zealand dairy giant Fonterra’s global e-auction platform have collapsed to $ 1,731 per tonne from the all-time-high of $ 5,142 less than three years ago. Nor is the 38-year-old, who farms two acres at Kasari village in the severely drought-hit Ashti taluka of Maharashtra’s Beed district, aware of India having an 18 per cent share of global milk production.

All he knows is that the milk that fetched him Rs 24 a litre last year today commands just Rs 15.

Bhosale would be willing to sell one of his three cows, but for the fact that there are no takers for them. The Maharashtra government’s comprehensive ban on cattle slaughter and beef consumption, imposed last March, has made it tough to find even transporters, with stories doing the rounds of police cases being slapped against van-drivers ferrying animals to markets.

While the ruling Bharatiya Janata Party’s legislator from Ashti, Bhimrao Dhonde, was quickly shushed after he voiced his dissent against the ban earlier this month, the closure of a significant income avenue via sale of non-productive animals — especially in these times of drought and crashing milk prices — is an irritant for many farmers like Bhosale.
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You paid Rs 20 for that one-litre bottle of water, right? I sold a litre of milk for Rs 17 today,” says Rajendra Giri, 40, displaying his receipt from the Dattakrupa Dairy in Tawalwadi, which is just a kilometre away from Kasari. He will be paid at the end of the week, a ‘pagaar’ (salary) that will help bring the vegetables and lentils for the next meal.

Bhosale and Giri are spending a scorching afternoon huddling under the hay-roofed shed of a cattle camp near Kasari. There are currently 297 such camps in Beed, Osmanabad and Latur, the three most-parched of the eight districts comprising the Marathwada region that also includes Nanded, Parbhani, Hingoli, Jalna and Aurangabad.

Unlike the two Kasari residents, who have no choice but to sell to the local dairy at Tawalwadi, Bhausaheb Aagam is somewhat better placed. He lives just 8 km from Beed city — as against 90 km for Kasari — where milk is retailing at Rs 32-35 per litre. At 10 am in the crowded Bashir Ganj area, Aagam has been standing for over three hours with a large aluminium jerry can at his feet, its lid snugly closing around the half-litre measuring ladle hooked at the mouth.

“I get at least Rs 10 per litre more than what it would be at the village,” Aagam says of the Rs 30 price he has managed to hold on to, even with customers who drive a hard bargain. Aagam drives the 8-km distance to the city in his own mini-van, while counting himself among the lucky few with an easy access to a market that doesn’t require dealing with procurement agents or a cooperative set-up: “The only people in Marathwada still able to make a living out of milk are people like me, working alone”.

For the region’s milk producers, facing their third drought in four years, the price that a litre of milk can get depends not just on its fat and solids-not-fat content, but also on whether they are selling to an agent stopping at the farm, going on their own to a dairy, or able to directly access a market of end-consumers.

“There aren’t any big private dairies in Marathwada or Vidarbha barring one or two, while the cooperative milk sector is almost non-existent in these two regions,” notes Dattatray Vishwanath Ghanekar, managing director of the Kolhapur Zilla Sahakari Dudh Utpadak Sangh, which owns the popular ‘Gokul’ milk brand and is based in western Maharashtra. Out of the estimated 80 lakh-plus litres per day of milk procured by organised dairies in the state — with near equal shares for the private sector and cooperatives — the Marathwada region’s
contribution is less than five lakh litres or so.

According to Ghanekar, most farmers in Marathwada and Vidarbha have only local non-descript animals. Now, with drought and low milk prices delivering a double-whammy, the few who maintain cross-bred cows and high-yielding buffaloes are making distress sales. Healthy three-year-old cross-bred milch cows are today being sold at Rs 22,000-24,000, compared to Rs 45,000-50,000 in normal times. The buyers here are mainly from western Maharashtra.

It is the low-yielding indigenous/non-descript breeds that have no takers, including traders who were earlier supplying to slaughter houses. These animals are the ones mainly populating the cattle fodder camps sponsored by the state government.

Santosh Chavan, a BJP leader from Ashti who has the contract to run the Kasari camp, points out that the village had some 1,000 animals until a year-and-a-half ago, when milk prices, too, were good. That number is down to 550-600, as some have died and others sold off. Also, of the five dairies operating in Kasari and nearby villages, the biggest one alone was procuring 6,000 litres a day of milk. “Now, they together purchase 1,500 litres. The remaining milk has no buyers. So, producers simply sell at lower and lower prices,” adds Chavan.

Ghanekar does not foresee any immediate improvement in the situation. The main reason is global dairy product prices: These would remain under pressure from China’s mounting economic woes, the Russian-West spat leading to surplus milk supplies in Europe and made worse by the end of the earlier regime of production quotas, and falling oil prices resulting in lower imports by West Asian countries.

India’s own SMP imports have fallen from a peak of 1.30 lakh tonnes (valued at Rs 2,717.56 crore) in 2013-14 to 34,490 tonnes (Rs 681.69 crore) in 2014-15 and further to 9,193 tonnes (Rs 174.21 crore) during April-December 2015-16. Maharashtra’s private dairies, unlike the cooperatives that have a strong liquid milk marketing business, are mainly into production of commodities like SMP and ghee. The crash in global prices has affected their operations, causing them to slash milk procurement and pay lower prices to farmers.

Meanwhile, in the cattle camps, nobody really cares about the wider economics. “Fix a minimum price for milk and a minimum purchase commitment by the government. For us, there is no other means of livelihood left,” declares Giri.
Resource: http://indianexpress.com/article/india/india-news-india/cattle-economics-when-milk-turns-sour-for-parched-and-singed-marathwada/

EU milk supply controls could have serious impact

THERE was a mixed reaction, particularly in Ireland this week, to the contents of the additional €500m support package announced by EU Farm Commissioner Phil Hogan to try to help farmers through the current income crisis.

The dairy, pigmeat and the fruit and vegetable sectors are the main focus as the European Commission announced that it would activate ‘exceptional measures’ to support farmers in crisis, which would complement last September’s €500 million in support measures to farmers. ‘This is a package of measures which can have a material and positive impact on European agricultural markets and it should now be given the chance to succeed,’ said Phil Hogan, Commissioner for Agriculture and Rural Affairs speaking at the Council of Agriculture Ministers in Brussels on Monday.

The actions include the next steps on doubling intervention ceilings for skimmed milk powder and butter, a storage aid scheme for pigmeat, a temporary increase in State aid limits; increased spending on promotion of EU produce inside and outside the EU. The Commission is also encouraging the Member States to make full use of the European Fund for Strategic Investment (EFSI) for investment in the agricultural sector and to look into the possibilities of setting up dedicated platforms for EFSI financing.

Minister for Agriculture Simon Coveney commented that ‘the package reflects the majority of the demands presented by Ireland to the Commission in our ten-point plan. In particular, the doubling of the intervention ceiling for skimmed milk powder and butter is a very significant announcement.’

However, he said: ‘I remain concerned about the references to supply control in the presidency conclusions.’

Cork South West Fianna Fáil TD Margaret Murphy O’Mahony also warned that milk supply controls from Europe have the potential to seriously impact on farmers in West Cork. ‘From an Irish perspective, bringing in such milk supply controls, even though they’re voluntary, represents a dangerous precedent in compensating for reduced production.

‘Ireland is heavily dependent on exporting dairy product to global markets.  90% of all milk produced in Ireland is exported.  Ireland produces about 5.5 billion litres of milk per year; while in 2015 total dairy exports were worth in the region of €4 billion in value.

‘While the measures are beneficial for France with an internal market of over 60 million people, this will hit exporting countries like Ireland, especially our capacity to take advantage when an upturn in the market takes place. Europe has taken the wrong decision here and this could seriously impact on the earning power of farmers in West Cork and across the country.

She said: ‘We need to see a review of price intervention tools in the dairy sector in order to deal with the current market volatility and low prices crippling dairy farmers. The essential floor for support should be increased from 21 cent to the cost of production per litre to the average EU production cost.’

Meanwhile, reacting this week, the Irish Co-operative Organisation Society (ICOS) has expressed its disappointment at the decision by the European Commission and Council of Ministers to agree to the introduction of voluntary supply management measures.

Resource: http://www.southernstar.ie/news/roundup/articles/2016/03/21/4116519-eu-milk-supply-controls-could-have-serious-impact/