Import of powdered milk up by 354%

Dairies boost stock to cash in on price fall in int’l market

KATHMANDU, April 21: Dairy producers are boosting their stock of powdered milk as price of Skimmed Milk Powder (SMP) has fallen in the international market.

Data compiled by Nepal Rastra Bank (NRB) shows import of powdered milk increased by a mammoth 354 percent in the first eight months of 2014/15 compared to the same period of last fiscal year. In monetary terms, private dairy imported SMP worth Rs 379.5 million in the review period, compared to import worth Rs 83.6 million in first eight months of 2013/14.

Officials of Nepal Dairy Development Board (NDDB) said import of SMP is increasing as dairy producers are increasing stock of powdered milk after its price dropped in the international market.

"Price of SMP has come down significantly in the international market. Because of this dairy producers are boosting their stock," Babu Kaji Pant, executive director of NDDB, told Republica.

According to Pant, SMP, which used to cost around Rs 16,000 for a 25 kg pack, is now available at around Rs 10,000.

Dairy producers import SMP from countries like India, New Zealand and Australia.

Pant also attributed rise in import of SMP to lean season in the country in terms of milk production. "The March-July period is regarded as off season for milk production low. Import of SMP generally increases at this time of year," he added.

Kathmandu Dairy has nearly one ton of SMP in stock. The dairy will use it for SMP toning once collection of fresh milk starts falling. "Milk production generally falls in summer season," Pradeep Maharjan, proprietor of Kathmandu Dairy said, adding, "Price of SMP has fallen at a time when we need it the most."

However, Dairy Development Corporation (DDC) and Sitaram Gokul Milks have yet to begin SMP import for the summer. "Rise in milk procurement cost has a positive impact on farmers. They are increasing supply of fresh milk," Ganga Timalsina, general manager of DDC, said. "We have reduced SMP import, thanks to increased supply."

According to him, DDC is using only around 100 tons of SMP for toning this summer compared to 600 tons in the previous years.

Sumit Kedia, director of Sitaram Gokul Milks, said the company has not imported powdered milk for the season yet because of increased milk production in the country itself. "We will procure powdered milk from local suppliers if needed," added Kedia.

According to NDDB, annual milk production currently stands at 1.6 million tons. Milk production is growing by 1.3 percent annually.