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With rising milk prices, skimmed milk powder touches record Rs 200 per kg
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Thursday, 26 May, 2011, 08 : 00 AM [IST]
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Archana Aroor, Mumbai
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Apart from causing sharp increase in prices of dairy products, the recent rise in milk prices has also triggered a 10 to 12 per cent rise in the prices of skimmed milk powder (SMP). Further fuelling the price rise is the rising demand for SMP. Today SMP in bulk is being sold at Rs 200 per kg.
“The demand for SMP is usually strong in summer, but the market is not ready to buy at the current price levels,” this was informed by a source from an SMP manufacturing company to FnB News.
The source explained that the prices increased to Rs 180 to Rs 200 per kg from Rs 165 a kg for SMP, on account of high demand and less production. With the increase in demand, small players with restricted production are likely to be affected. The crisis could also be a result of restriction on export and import of SMP in the country.
However, the government has imported about 15,000 tonnes of milk powder this year, particularly, targeting companies like Parag, Amul and Mother Diary and ignoring the smaller players in the market.
He said that the ban on export, which was imposed in February, to control milk prices and the rising demand closed avenues for not only milk processors, but also for the traders to deal with the increasing prices.
According to reports, the prices are likely to come down as the processors cannot keep the stocks for long and a reduction of up to Rs 10 per kg is likely to come about soon. Until December, the prices were at Rs 165 per kg but a spurt in milk prices has led to lower sales of milk powder this year.
The source further reiterated that it would be impossible for the milk processors to apprehend the shortage and that the private players would soon opt for alternatives to compensate for the ongoing SMP crisis.
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