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EU under pressure to reduce dairy exports

According to a European Commission report, EU's market share of global butter exports are expected to drop to 22 per cent by 2015 from 38 per cent in 2005.

business Updated: Jun 19, 2007 19:17 IST

The European Union, a major exporter of dairy products, is likely to witness a dip in overseas sales of milk articles due to the rising domestic demand, a situation similar to India, if a report by the European Commission is anything to go by.

According to the report, EU's market share of global butter exports are expected to drop to 22 per cent by 2015 from 38 per cent in 2005.

Exports of skimmed milk powder (SMP) and cheese from the EU are also likely to be hit because of growing consumption there, the report said.

Back home in India, the government had on February 2 banned export of SMP till September, fearing further increase in milk prices.

Although the industry expects that the ban will be lifted in September, the government is non-committal on the same.

Animal Husbandry and Dairy Secretary Charusheela Sohoni last month said the government has to keep the consumers' interest in mind at the time of reviewing the decision.

Prices of SMP have now increased to 4,400-4,900 dollar (Rs 1,78,200-1,98,450) per tonne in the international market from 3,000-3,250 dollar a tonne in February this year.

In India, skimmed milk powder currently rules in the range of Rs 1,40,000-1,42,000 per tonne, a milk processor said.

Agriculture Minister Sharad Pawar last week said India, which is the largest milk producer in the world, would have to increase its milk production by five million tons every year to meet the expected demand of 180 million tons by 2021-22.

He said efforts must be made to raise the marketable surplus of the organised dairy sector from the current level of 30 per cent to 70 per cent by 2021.