Drought and a 10-15 per cent dip in milk production have pushed up prices of skimmed milk powder (SMP) both in the domestic and international markets. While SMP prices in the domestic market have crossed Rs 200 per kg, in the international market, the commodity traded at $2,201 per tonne.
A global glut had pushed prices of SMP down, which had thrown the dairy industry into turmoil. Dairies had taken to slashing the procurement price of farmers and at present, farmers in Maharashtra are being paid at the rate of Rs 18-20 per litre for their milk with 3.5 per cent fat and 8.5 per cent SNF (solid-not-fat).
On Wednesday, SMP traded at $2,201 per tonne at the online trading platform of New Zealand’s dairy giant Fonterra. SMP prices were below the $2,000 per tonne mark for the better part of last year.
But present prices are lower than the $2,574 per tonne mark — the price at which the commodity had traded last January. Domestic SMP prices for the better part of 2017 were in the range of Rs 140-150 per kg, which have since gone up to Rs 200 per kg.
Dairies convert the excess milk they collect into SMP, which is both a tradable as well as an exportable commodity. On average, India produces four lakh tonne (lt) of SMP of which 1 lt is exported.