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Strategic Priorities for Boosting India’s Dairy Exports: RS Sodhi

RS Sodhi, President, Indian Dairy Association and Former, MD Amul

NEWS DELHI. In the fiscal year 2022-23, global dairy exports reached 101 billion USD. India’s dairy exports constituted 67,572.99 metric tonnes, valued at Rs. 2,269.85 Crores or 284.65 USD Million. Notably, India’s dairy export share is a mere 0.25% of the expansive world dairy trade. Despite being a dominant contributor to global milk production (24%), India’s dairy exports are disproportionately low. If we talk about world trade in agriculture products, export from India is 52.63 billion USD, which is 2.9% of the world trade of 1809.3 billion USD. In case of Marine products, world trade is 168 billion USD and India’s contribution is 7.7 billion USD, which is 1.72%. It is clearly evident, that despite contributing to 24% in India’s agriculture, contribution of Dairy products in export is negligible as compared to other agriculture commodities. Anticipated growth to 30% by 2030 and 45% by 2047 in global milk production underscores the urgency for an export oriented dairy strategy as domestic demand cannot absorb increased production, otherwise domestic milk prices will become unsustainable for the milk producers.

The government is actively promoting milk production, primarily through breeding programs and expanding livestock numbers. Over the past eight years (2013-14 to 2021-22), India has witnessed a remarkable 61% increase in milk production, reaching 230.58 million metric tones. The surge in milk production, this year, has disrupted the equilibrium of demand and supply. Although the government is yet to release the National Sample Survey Office’s (NSSO) per capita spending on milk and milk products report, it is anticipated to be disclosed in the upcoming month.

Strategic priorities for catapulting India’s dairy industry into a global export powerhouse encompass multifaceted initiatives. Firstly, a paramount focus is placed on cost optimization to bolster international competitiveness, emphasizing the imperative need to lower milk production costs through strategic interventions in breed enhancement and feed management. Simultaneously, a commitment to elevate quality standards to global excellence is underscored, necessitating the implementation of stringent quality control measures throughout the production chain and the integration of cutting-edge technologies for robust quality assurance.

Another pivotal aspect involves holistic disease management, wherein comprehensive control measures against Foot-and-Mouth Disease (FAID), Aflatoxins, and mastitis are prioritized, coupled with significant investments in research and technology for early detection and prevention. Lastly, the promotion of Brand India for dairy products emerges as a critical strategy, encompassing targeted marketing campaigns to spotlight products such as Cow Ghee, Buffalo Ghee, Veg Cheese, Buffalo Cheese, Paneer, and traditional sweets, supplemented by collaborative efforts with international influencers to amplify global visibility. This integrated approach aims to position India’s dairy industry as a dynamic force in the global market, ensuring sustained competitiveness and economic impact.

Several region-specific measures are imperative for enhancing India’s dairy exports. Notably, countries like South Africa, Mexico, and Venezuela currently prohibit the import of Indian dairy products due to the absence of a government trade protocol. It is recommended that the Indian government engages with the respective authorities of these nations to elucidate the Indian Milk Export system, including EIC monitoring, and establish a concrete trade protocol for dairy products. In the case of Indonesia and Malaysia, their insistence on Halal approval necessitates aligning EIC-approved plants and Indian Halal standards to meet their acceptance criteria. Moreover, addressing the reciprocal ban imposed by China, the world’s largest dairy product importer, following the melamine scandal is crucial; India should proactively lift the ban and encourage China to reciprocate. Similarly, overcoming the prolonged issues with Russia, where their own Veterinary control team approval is pending for Indian dairy plants for over seven years, requires diplomatic efforts to persuade Russia to accept EIC approval for exports. Additionally, addressing Egypt’s adherence to EU standards for Aflatoxin, which led to the cessation of Indian milk powder imports (resolved similarly with Saudi Arabia), necessitates government intervention to encourage Egypt to follow Codex standards, ensuring a conducive environment for Indian dairy exports.

Indian Dairy Association gave representation in the recently held meeting of Board of Trade, organized by Govt. of India, Department of Commerce, Ministry of Commerce and Industry at Bharat Mandapam, Delhi, and raised concerns of Indian Dairy Industry in export of Dairy products which include all the above-mentioned points.

In the 348th trading session concluded on the Global Dairy Trade (GDT) on the New Zealand Exchange, GDT index increased by 2.3% compared to the previous session. It was the third consecutive increase in the index, indicating a positive bias in global dairy trade. WMP prices rose 1.9%, with good involvement from Middle Eastern buyers. SMP prices rose 1% following price falls at the past two events. Chinese buyers took the highest tonnage since November, while weaker European sentiment weighed on EU contract prices. Fats ruled again, with butter once again the standout, prices rose 7.1% while AMF prices rose 4.4% to the 10th consecutive price rise. The Indian dairy industry stands to benefit from the current global prices of fat, presenting a significant opportunity for export, contingent on meeting international quality standards. However, there exists a pricing gap concerning skimmed milk powder.

National conference on “Smart and Sustainable Dairy Farming” was organised by Indian Dairy Association, (West Zone) in association with Indigenous Cattle Research cum Training Centre (ICRTC) of Mahatma Phule Krishi Vidyapeeth, Rahuri (MPKV) and BAIF Development Research Foundation at Agriculture College, Pune during January 5-6, 2024. The program was attended by about 300 delegates representing academic institutions, private and cooperative dairies, other dairy related companies and students. The program deliberated on importance for the agriculture scientists to come together with the industry and discuss the ways in which dairy farming can be made more sustainable. It was also emphasized that farmers and dairy professionals have to be smart to keep the dairy sector sustainable, which is a livelihood for millions of families across the country.

I believe there is need for smart practices in the entire food sector, not just dairy. It is important to make the food industry including dairy sustainable by ensuring commercial viability for farmers and offering affordable, nutritious products to consumers. There is a need for efficiency in the Indian production system to counter global competition and stresses, improvements in conception ratios and energy efficiency in the dairy industry. Digital integration is proposed to enhance transparency and sustainability, and I advocate addressing food inflation to bring prosperity to farmers, which in turns will result in achieving goal of sustainability.

Source: Indian Dairy Association

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