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“EXPORT POTENTIAL OF MILK PRODUCTS FROM INDIA”
THE STATE TRADING CORPORATION OF INDIA LTD.
NEW DELHI UNDER THE GUIDANCE OF
Mr. G.C.KHUTTAN (Deputy General Manager) Mr. R.C.SAHNI (Deputy Marketing Manager)
ABHAI PRASAD (MIBA, 3RD SEMESTER)
FACULTY OF MANAGEMENT STUDIES BANARAS HINDU UNIVERSITY
Page No. 1. Acknowledgement 2. Preface 3. Objective of Study 4. Research Methodology 5. Organisational Profile 6. Information About Dairy Products 7. Export of Indian Dairy Products 8. Export Forecasts 2010 9. Analysis & Findings 10. Recommendations 11. Bibliography 3 4 5 6 7-21 22-27 28-37 38-40 41-44 45-46 47
I take this opportunity to express my sincere gratitude to Mr. G.C.Khuttan, Deputy General Manager, State Trading Corporation of India Ltd., who took the initiative to give this interesting project and for his expert guidance and kind help. I am deeply indebted to Mr. R.C.Sahni, Deputy Marketing Manager, my guide for this project, who’s vast reservoir of knowledge was of immense help for the successful completion of this project. I am also thankful to him for associating me in many practical cases, which gave me an important insight into the difficulties faced and their solutions thereon, while dealing in international market. I would also like to express my gratitude towards Dr. Deepak Burman, Head and Dean, and Dr. H.C.Chowdhary, for their valuable and kind support. It’s my pleasure to record my sincere thanks to all of my faculty members and my parents and all those people who constantly supports me. Though every effort has been made to minimize the faults and errors but in case of any discrepancies or fault, the sole responsibility is mine.
Abhai Prasad (MIBA, 3rd Sem.)
For the deep understanding of the management concepts, practical training is important. Theoretical knowledge gives us the fundamental concepts of management and practical training teaches us how these concepts are used to capture today’s competitive market. Theoretical lectures must be correlated with practical training to make learning process more effective and to provide a platform to judge and apply one’s theoretical knowledge to practical situations. Practical training thus plays an important role in developing and sharpening one’s skill in the field of business and management and administration. I have undergone 8 weeks of training at State Trading Corporation of India Ltd., New Delhi. During the training I have worked on the project “Export Potential of Skimmed Milk Powder and Other Milk Products from India”. Being a student of management, the training contributed a lot in gaining knowledge about the actual business environment.
To assess the export potential of Milk Powder and other Milk Products.OBJECTIVES OF STUDY Objectives of this project includes the following To study about the basics of Milk Powder and other Milk Products. To present a Quantitative and Qualitative overview of the world trade in Milk Powder and other Milk Products. 5 . To identify the world markets for Indian Milk Powder and Milk Products. To study about Milk Powder and other Milk Products export. To study the major constraints faced and strategies required for promoting exports of Milk Powder and Milk Products.
Secondary Data: Secondary Data was collected from libraries of STC. 6 . APEDA etc. Beside these some relevant journals were consulted. Data were also collected from websites of organisation related to milk industry.RESEARCH METHODOLOGY Primary Data: Primary Data was collected from the employees of the Manufactured Foods Division of STC.
(STC) is a premier international trading house owned by the Government of India. the Corporation has developed vast expertise in handling bulk international trade. By virtue of infrastructure and experience possessed by the Corporation. 7 . it plays an important role in arranging import of essential items into India and developing exports of a large number of items from India. Having been set up in 1956. Because of Corporation's in depth knowledge about the Indian market. Though. The eventful track record of more than 52 years has helped STC to gear itself to face the fierce competitive challenges. STC is future ready to take advantage of the opportunities in the 21st century and help propel India towards the new frontiers in world trade.ORGANISATIONAL PROFILE 1) About State Trading Corporation The State Trading Corporation of India Ltd. today it trades with almost all the countries of the world. result oriented approach. STC is able to supply quality products at most competitive prices and ensure that the goods reach the foreign buyer within the prescribed delivery schedule. It exports a large number of items ranging from agricultural commodities to manufactured products from India to all parts of the world. seize business initiatives and build on its core competencies. strong belief in productivity and accountability. dealing largely with the East European countries during the early years of its formation. It also imports bulk commodities for Indian consumer as per demand in the domestic market. With a global vision in effective management.
Its has undergone make-over from being a bulk trading agency in commodities to a one-stop shop that offers specialised trade facilitation. Unless STC prepare itself through value-addition in trading operations. With so much competition and the market opening up. STC has devised several plans to position itself through backward and forward integration and industrial participation programme with best international companies so that not only its requirements are met but the country too gets the best technology at affordable cost. Arvind Pandalai. To make the best use of the financial strength of the corporation in expanding its business. the trading scenario is going to change. 2) Mission of STC To emerge as one of the largest global trading companies with international standards of excellence nurturing a blend of quality. nobody is going to come to it. 3) Corporate Objectives • • • To develop core competencies in select areas of export and exploit the market opportunities in these areas to the best advantage of the corporation. To undertake continuous horizontal and vertical diversification thereby enabling sustained growth of business. 8 . by drawing from experience and contacts built over five decades.In last couple of years STC has undergone dramatic changes under the dynamic leadership of Dr. business ethics and proactive enthusiasm to enhance stakeholders’ value.
employees. Merit Certificate for Excellent performance in terms of MOU: 2005-06.• • • • • To lay emphasis on quality of services to customers so as to develop long term business relationship with buyers and suppliers in and outside the country. Govt. To strive to pay adequate returns to the stakeholders. of India. and the community. To act as a facilitator to small and medium exporters and importers.1 rank consecutively for the second year as per Super 100 companies study by Business India. 4) Recognition Earned • • • • No. • • To ensure an efficient and streamlined system of operations at minimum transaction cost. To fulfill the Corporation’s social responsibility by following ethical business practices and reinforcing commitment to customers. 3rd rank among trading companies of the country according to ‘India’s Top 500 Companies’ Survey by Dun & Bradstreet. 17th rank among 207 PSUs by the Department of Public Enterprises. To undertake market intervention operation as and when advised by the Government of India. 9 . Ministry of Heavy Industries & Public Enterprises. • To undertake training/re-training of existing manpower on a continuous basis and induct professionally qualified young talent to create a cadre of highly professional and motivated managers. partners. To create new infrastructure and ensure optimum utilization of the infrastructure available with the Corporation.
29. Consistently increasing net profit – Rs. • • • • crore. Signed MOUs with BEML and MSTC for mutual co-operation in augmenting Signed contract with NTPC for supply of 5 million MT of non-coking steam coal valuing Rs. imports and domestic trade.5) Performance Highlights (2006-07) • • • • India. supply of branded tea to public distribution system through Gujarat State Civil Supplies 10 . EPS: Rs. procurement of tea leaves directly from small growers for processing and marketing. • • trade.14335 crore.600 All time high turnover – Rs. up 126% over 2005-06.12.88 crore.98 in the previous year. Effected all time high exports of chemicals & pharmaceuticals – over Rs.43 – up 127% from Rs.2985 crore.2200 crore. Successfully extended overseas steel operations to Bulgaria. Successfully undertook 55 lakh MT of wheat on behalf of the Government of 6) Looking Ahead The phenomenal rate of growth achieved in the recent past makes STC look ahead with hope and confidence.199 crore. Diversified into exports of gold jewellery – Rs. • ‘Excellent’ rating in terms of MOU: 2006-07 for the fourth year in succession. contributed by best ever performances of exports. Undertook high bullion imports – Rs. It expects to reap dividends in the near future from the recently undertaken initiatives such as acquiring plot of land at Paradip port for iron ore operations.
Other new initiatives in the pipeline include expanding steel operations to Nigeria. etc. STC is committed to profitably exploit the various opportunities coming up globally. setting up chillies sterilization plant and food testing laboratory in Chhindwara. refining and marketing of edible oils under STC’s brand. long-term arrangement with a leading international supplier for import. online trading through commodity exchanges.Corporation. diversification into bio-fuels. 11 . setting up of chillies and pepper processing plants in Karnataka (through subsidiary company STCL).
Engg.Market Intelligence . K.Tea . C.Building Cell .Finance & Accounts S CHOWDHARY (Chief Vigilance Officer) CGM (Surender Kumar) .Middle East Desk .Hydrocarbons .Branch Operations CGM-I/C (Amit Raha ) .Legal DGM (Om Prakash) .General Administration .Mustard Extractions DGM-F (A . Moton) .Corporate Planning .Wheat .Vanaspati . Materials -Chemicals.K. /Const. Kajla) . Grants .CIS Desk CGM (R.Coffee .Tobacco .Protocol DGM (Babu Lal) .Internal Audit 12 .Vigilance GM (Samir Kaul) .Cement .Jewellery .America Desk .Iron Ore .Soya Extractions N K NIRMAL Director (Finance) CGM-F (B.C.Petrochemicals . & Parliament DGM (S. K. K. ARVIND PANDALAI Chairman & Managing Director S S R BURMAN Director (Marketing) CGM (A.Information Technology DGM (N B Pant) . Scrap (Ferrous & Nonferrous) DGM(S L Jauhari) .Project Exports .Metal Scrap (NLC) CGM-I/C (Ashok Kalra) GM (SNRajaguru) .Rice Bran GM (Prakash Chand) .Newsprint N K MATHUR Director (Marketing) CGM (S.Insurance .Edible Oils .Manufactured Products . Venkat Ram) .Africa Desk .Gold/Silver . Mani) GM –I/C (RL BATRA) .Travel Cell/Library GM-I/C (Sharab Shringla) .Board Sectt. Metals.Jute Goods .Govt.Public Relations/Publicity .Coarse Grains .Personnel . Drugs& Pharma .Steel Items .Almonds .General Imports . Sinha) .Development of New Items CGM (B.Khuttan) .HRD DGM (G.Europe Desk .Sugar .Minerals. Tuli) .Datta Majumdar) GM (V.Rubber .ORGANISATION STRUCTURE DR.Pulses .Rice .Electronic Equipments GM (B.Cashew .Housing Colony . Sarkar) . Gupta) .Asset Utilisation .Castor Oil/Seed .Counter Trade CM-F (Vinod Sharma) .Management Services .
whose products sail the seas via STC.all the way to the final shipment to the entire satisfaction of the buyer. * Taking products of small scale manufacturers to international trade fairs and exhibitions. documentation. STC helps thousands of Indian manufacturers to find markets abroad for their products. To the Indian Industry : The Indian manufacturers. and oversees quality control . * Market intervention on behalf of the Government. undertakes negotiations. * Assistance in the areas of marketing.guides and helps them manufacture products that will attract buyers abroad. STC assists the manufacturers to use the best raw materials. etc. the Corporation renders following services: To the Overseas buyer : STC acts as an expert guide for buyers interested in Indian goods. quality control. * Import of machinery and raw material for export production. fixes delivery schedules. For them. STC finds the best Indian manufacturers. benefit a lot from its expertise. Some of the other services offered by STC to the Indian manufacturers include : * Financial assistance to exporters on easy terms. packaging. technical know-how. * Supply of imported goods in small quantities as per convenience of buyers. 13 .SERVICES PROVIDED BY STC While undertaking import and export operations.
wheat and pulses to meet domestic requirements at a very short notice.To the Indian Consumer: The Indian consumers also benefit from STC's expertise and infrastructure. STC imported sugar. During the last one decade. STC imports essential commodities for them to cover shortfalls arising in the domestic market. EXPORTS FROM INDIA BY STC 14 .
right quality and adherence to delivery schedules to the buyers abroad. STC seeks to introduce new products. for the second year in succession. growth in exports has outstripped the import growth. STC makes purposeful use of its world-wide connections. Chemicals. Principal Items of Export 15 . The main areas that helped in bolstering export are: Steel Operations. Jewellery. Exports by STC vary from traditional agricultural commodities to sophisticated manufactured products.2900 crore showing a strong growth of 167%. Quality Control and Import of machinery and raw materials for export production. In the year 2006-07 exports recorded the best ever performance of over Rs. The growth achieved is far higher than the national growth of about 24% in exports. The outstanding export performance is mainly due to expansion of overseas steel operations that are now also being undertaken in Bulgaria besides higher volumes achieved from similar operations in Philippines.STC exports a diverse range of items to a number of destinations throughout the world. Exports achieved are over thrice the MOU target. Besides negotiating. In fact. contracting and shipping. explore new markets and undertake wide ranging ancillary functions such as Product Development. abundant experience. upto-date information about the market trends and long term perspective on various commodities to ensure competitive prices. Drugs & Pharma. Financing. Iron Ore.
Agricultural Commodities -Wheat -Cashew -Coffee -Rice -Tea -Tobacco & Rubber -Sugar -Extractions -Opium -Spices Manufactured Commodities -Chemicals. Drugs and Disposables -Engineering & Construction Materials -Consumer Products -Textiles and Garments -Leatherware -Processed Foods -Iron Ore -Steel Raw Materials IMPORTS INTO INDIA BY STC 16 .
10700 crore due to wheat imports and significant growth in a number of other items. Major items contributing to the better import performance are: Wheat. the Corporation makes best use of its strength in handling bulk imports. In the process. Imports for the year 2006-07 also grew by 95% to reach an all time high level of Rs. Hydrocarbons. Edible Oils/Vanaspati. Bullion. Principal Items of Import Agricultural Commodities -Edible Oil -Sugar -Wheat -Fatty Acids -Pulses Manufactured Products -Hydrocarbons -Gold & Silver -Minerals/Metals -Petro-chemicals -Fertilisers -FMCG Goods -IT Products FINANCIAL PERFORMANCE OF STC 17 . vast infrastructure and above all an experience of over four decades in fulfilling the needs of the industry. STC serves the national objective by arranging timely imports at most competitive prices.STC imports a number of essential commodities to cover the domestic shortfalls and hold the price line. Minerals & Metals.
63 6.96 300.62 0. 2005-06.328.78 90.06 21.29 1.448.992.72 455.72 5.21 1. loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written TOTAL Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity shares outstanding (Lacs) 30.97 24.84 27.65 2.54 27.15 2.93 168.93 219.40 90.94 337.77 717.14 202.08 5.16 1.43 567.65 48.330.00 Mar ' 06 30.00 Mar ' 05 30.00 403.87 49.87 2.206.71 90.15 449.00 335.73 567. 2007 18 .93 123.60 28.392.72 2. Crore) Mar ' 07 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans TOTAL Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets.62 177.60 53.Balance Sheets of STC (for Financial Year 2004-05.00 300.537.04 449.83 21.054.11 300.00 289.86 1.00 Profit & Loss Account For the year ended 31st March.60 2. 2006-07) (Values in Rs.99 129.72 3.328.
807.490.52 6.812.34 29.14 178.616.88 6.24 4.60 (609.34 921.916.94 9.01 720.167.97 1.590.74) 131.524.873.94 4.30 12.03 Current Performance Indicators: 19 .67 5.68 4.895.49 224.33 705.85 15.97 1.38 (12.176.526.041.86 11. Lacs) Particulars Income Net Sales Other Income (Trade) Interest Income Miscellaneous Income Total Expenditure Cost of Goods Sold Overheads Interest Depreciation Write-Offs Pro.51) 12.564.98 Year Ended 31st Mar.44 5.43 10.73 1.879.03 0.433.918.71) 5.05 3.31 3.398.733.06 712.93 726.63 5.19 0.75 (89.827.31) (776.747.74 (210.961.(Rs.425.134.370.52 100.228. 07 1.55 8.86 146.69 3.088.02 547.445.60 1.458.272.450 248.47 1.72 2.) Year Ended 31st Mar. Against Doubtful Receivables & Investments Total Profit before amortization & prior period items Prior period adjustments Profit before Tax Income Tax Current Tax Tax relating to earlier years Deferred Tax Deferred tax relating to earlier years Fringe benefit tax Profit after tax Balance as per last account Transfer from Bonus Reserve Transfer from Export Devp.699.355.76 9.55) 69.444.182.57 3.22 12.669.43 1.616.59 5. Fund Profit available for appropriation EPS (in Rs.
541 Crore (US$ 135 million) 20 . 107 Crore (US$ 27 million) Rs. 15345 Crore (US$ 3825 million) Rs.Annual Turnover: 2007-08* Net Profit: 2007-08* Equity Net Worth (as on 31.3. 60 Crore (US$ 15 million) Rs.2008)* *: Provisional Rs.
Project “EXPORT POTENTIAL OF MILK PRODUCTS FROM INDIA” 21 .
The fat content is not more than 1. Apart from the above.5% (by weight) unless otherwise indicated. nor more than 40% milk fat and not more than 5. It contains not more than 5.0% moisture (as determined by weight of moisture on a milk solids-nonfat basis).To know about the export potential of any product it is necessary: 1) To find which products can be exported. Brief Information about Different Dairy Products Brief Information about Milk Powder Product Definition • • • • Milk Powders are essentially substitutes for liquid milk. Milk Powder is normally used only when available milk is not of good quality. Milk Powder can be classified into the following categories: • Skimmed Milk Powder. • Whole Milk Powder.Nonfat Dry Milk is the product resulting from the removal of fat and water from milk and contains lactose.Dry Whole Milk is the product resulting from the removal of water from milk and contains not less than 26%. 2) To identify those countries where product can be exported.This is the type of milk powder from which a major portion of fat is removed and Vitamins and Minerals are added. • Infant Milk Powder. custard etc. they are used for culinary purposes and can be used for making products like kheer.0% moisture (by weight). protein and minerals in the same relative proportions as in the fresh milk from which it was made. 22 . Maximum use of milk powder is for whitening tea and coffee.
0-37. Spray drying is the most used method for producing milk powders.Objective of Production • • • • To remove the moisture so as to reduce bulk. more economical Homogenization may be applied to decrease the free fat content. it also inactivates the enzyme lipase which could cause lipolysis during storage.0 36.6 3. like Ready to Eat to food.5-27.5 2. thereby effecting a saving in storage space and packaging costs.5 26.5-4.25 8. To increase the storage life of the product (due to low moisture content).0 49. To reduce the cost of transportation (due to reduced bulk). Besides destroying all the pathogenic and most of the spoilage microorganisms.0 (non-instant) 3.0-28.5-52.5 5.5 less occluded air and longer shelf life for the powder viscosity increase leads to larger powder particles less energy required to remove part of water by evaporation. After drying. The milk is then evaporated prior to drying for the following reasons: • • • Protein Lactose Fat Ash Moisture Whole Milk Powder 24.0-38. To provide a product this can be utilized for many food-manufacturing operations. standardized and then given a heat treatment.5-6.0-4.2-8.6-1. Quality standard of Milk Powders Skimmed Milk Powder 34.0 0.0-4.5 (instant) Brief Process of Preparation of Milk Powder Milk used in the production of milk powders is first clarified. This heat treatment is usually more severe than that required for pasteurization. the powder must be 23 .
Instant milk powder is produced by partially rehydrating the dried milk powder particles causing them to become sticky and agglomerate. To look into the level of contamination of milk powder. which makes it unfit for consumption. and other foods where a high degree of protein denaturation is required. This product is used in the bakery industry. maximum shelf life extended to approximately 3 years Low-heat SMP is given a pasteurization heat treatment and is used in the production of cheese. heat treatment prior to evaporation can be more or less severe 3. heavy metals etc. chocolate industry. etc. To see whether the product has been prepared hygienically or not. High-heat SMP requires a more intense heat treatment in addition to pasteurization. Contamination can be in the form of pesticides. baby foods etc.. Whole milk powder can then be stored for long periods (up to about 6 months) of time at ambient temperatures. light. Need for Quality Standard in Milk Powder • • • • • To see whether minimum specifications are met regarding nutrients it contains. The water is then removed by drying resulting in an increased amount of air incorporated between the powder particles. Brief Information about Cheese 24 . contains less milk fat (0. Skim milk powder (SMP) processing is similar to that described above except for the following points: 1. To look whether there is any kind of adulteration. homogenization not required 4. air.10%) 2. like using both cow and buffalo milk for producing milk powder.05-0. For purpose of export it is necessary to meet the minimum quality standard of the particular country.packaged in containers able to provide protection from moisture.
the cheese (and also. Some of the most commonly used Cheese are given as follows: • Processed Cheese: Processed cheese is made from traditional cheese and emulsifying salts. It is inexpensive. often with the addition of milk. skim milk.Product Definition Cheese. etc. Cottage cheese. The cheeses are eaten fresh. preservatives. Standard for Different Cheese Fresh Cheese 35% 7-8% 60% Processed Cheese >40% 23% 45-47% Fat Protein Moisture Brief Information about Whey 25 . not ripened. are some common examples of fresh cheeses. Processed cheese contains natural cheese and emulsifying agents.. • Blue-veined cheese: To allow the growth of their distinctive bluish or greenish interior molds. in a number of varieties. It is also available in spray cans. or water that raise the moisture content of the product. rennet (or rennet substitutes) to coagulate the milk to "curds and whey. more salt. and do not have a rind. and melts smoothly. consistent. They are typically injected with a mold strain." can be more dispassionately defined as a product of milk fermentation. these cheeses are never pressed. and food coloring. sometimes. This is accomplished by first acidification with a bacterial culture and then employing an enzyme. which has been described as "milk's leap toward immortality. It is sold packaged and either pre-sliced or unsliced." The precise bacteria and processing of the curds play a role in defining the texture and flavor of most cheeses. and then pierced to expose the insides to air. milk powders. Cheese is made by coagulating milk. the whey) is usually transferred to plastic tubs and covered. • Fresh cheese: After the formation of curds. cream cheese. but add other ingredients like whey.
Such supplements are especially popular in the sport of bodybuilding. crackers and commercial pastry.5-5.3-0.75-0. It is also an additive in many processed foods. Whey protein (derived from whey) is often sold as a nutritional supplement. including breads.5% 4. it is a by-product of the manufacture of cheese or and has several commercial uses.85% Brief Information about Ghee Product Definition 26 . Whey is used to produce and brown cheeses and many other products for human consumption.Product Definition Whey or milk plasma is the liquid remaining after milk has been curdled and strained. Quality Standard for Whey Calories Fat Carbohydrate Protein 30 kcal/100gm 0.5% 0. and in animal feed.
Preparation Ghee is made by simmering unsalted butter in a large pot until all water has boiled off and protein has settled to the bottom.5% 0. provided it is kept in an airtight container to prevent oxidation and remains moisture-free.5-1% 900kcal/100gm. Value: in Lakhs) 27 . ghee can be stored for extended periods without refrigeration.5-99. Quality Standard for Ghee Milk Fat Moisture Calories 98.Ghee is a class of clarified butter that originated in the Indian subcontinent and is important in South Asian and Middle Eastern cuisine and Egyptian cuisines and in Ethiopian/Eritrean cuisines. Unlike butter. The cooked and clarified butter is then spooned off to avoid disturbing the milk solids on the bottom of the pan. Export of Indian Dairy Products: Recent Trends 1) Overall Export of Milk Products (Country Wise) [Table 1] (Qty: in MTs.
20 5108.98 1067.81 489.18 1866..93 605.49 2720.81 4979.65 6339.10 498.58 1772.74 1617.A.53 402.42 4539.97 35869.E.68 797.20 4075. Egypt Bangladesh Nepal Algeria Thailand Pakistan Yemen Arab Republic Philippines China Total (All Countries) 2006-07 Quantity Value 5006.41 55227.04 316.84 1915.43 1461.54 5029.69 3494.87 238.78 374.90 644.08 1630.38 5324.50 5805.40 4528.02 1089.95 2394.50 1458.74 2804.71 4797.02 581.E.21 398.05 1853.60 2658.27 1309.06 39515.51 1853.06 2873.A.) Skimmed Milk Powder (Top 10) (Ranked according to 2006-07 data) 2004-05 2005-06 Quantity Value Quantity Value 2119180 167557055 4879195 398127982 9506500 585607576 5829825 493305825 2320821 204229827 2590006 200045045 2537000 238646703 4798200 420333109 28 Country Egypt Bangladesh U.02 449.61 Country U.31 1610.39 1469.Dairy Products (Top 10) (Ranked on basis of 2006-07 data) 2004-05 2005-06 Quantity Value Quantity Value 4094.53 37391.41 2) Skimmed Milk Powder Data (Country Wise) [Table 2] (Qty: in Kg.47 1654.16 7504.84 4447.36 1163.12 59745.67 10922.76 6388.15 42160.65 16053.80 4456. Algeria 2006-07 Quantity Value 4763600 493418470 3061500 303393312 2378563 241465751 1772051 177255134 .84 5733.21 1116.86 1712. Value: in Rs.24 2283.64 2426.38 2477.50 1536.19 5145.
) Whey Country China Myanmar Korea (Ranked according to 2006-07 data) 2004-05 2005-06 Quantity value Quantity Value 727150 3638044 1370000 89650787 0 368000 9 0 1472085 0 0 0 0 1226565 0 0 75000 0 48000 10000 0 0 3073800 0 2981720 297860 2006-07 Quantity Value 757000 62635095 50000 50000 31000 600 0 0 5547216 3969280 2043920 12375 0 0 Republic U.A 0 Nepal 0 Syrian Arab 0 Republic Singapore 25000 29 .Thailand 261000 Yemen Arab 241500 Republic Pakistan Philippines Syrian Arab Republic Morocco Total (All Countries) 603206 427000 205000 18117456 20501547 46026077 35114813 16419082 1074470 3866400 2000938 232000 832000 1240051 4042612 120949649 365601437 178515277 21327724 72333528 119422274 355794577 0 1696600 1356119 1243500 771150 741900 156758686 136817728 117929033 110088615 103659083 578000 49856023 26562906 205353519 5 1077800 993659083 26045199 2686634569 3) Whey Data (Country Wise) [Table 3] (Qty: in Kg..S. Value: in Rs.
(Ranked according to 2006-07 data) 2004-05 2005-06 2006-07 Quantity Value Quantity Value Quantity Value 77701 7323640 193056 197887700 296350 31793899 30 . Value: in Rs.A..E.Japan Total 0 (All 1268350 0 5904520 3 256000 1775100 19356840 0 116355252 888600 0 74207886 Countries) 4) Whole Milk Powder (Country Wise) [Table 4] (Qty: in Kg.. Value: in Rs.) Cheese Country U.) Whole Milk Powder (Ranked according to 2006-07 data) Country 2004-05 2005-06 Quantity Value Quantity Value Nepal 10000 883660 59909 6002077 Oman 0 0 0 Djibouti 0 0 0 Saudi Arabia 0 7800 536400 Netherlands 0 0 0 Total (All 17000 1398794 85517 7747281 Countries) 2006-07 Quantity Value 138615 9152706 16000 1579582 14000 1497258 9000 243650 100 14360 177915 12492783 5) Cheese (Country Wise) [Table 5] (Qty: In kg.
.Sri Lanka Singapore Morocco Nepal Total (All Countries) 3980 33645 0 24025 290375 785752 3244841 0 2558885 31668153 43895 67980 200500 85914 1027454 7452790 7133021 24343306 6926892 103232359 98934 101338 80000 43225 864042 14980846 12252074 9402757 5654011 103365630 6) Ghee (Country Wise) [Table 6] (Qty: in Kg.) Cheese (Top 10) Country U.E. Value: in Rs.A. Kuwait Australia Sri Lanka Singapore Oman Bahrain Saudi (Ranked according to 2006-07 data) 2004-05 2005-06 Quantity Value Quantity Value 1087050 167409850 1063319 160812526 185000 27578683 236700 38450587 184656 28085499 1237411 141173100 29650 3886043 121490 13988807 1220 124346 13030 625561 104878 10256184 114665 11394646 97800 14443896 53800 7985945 94115 13091444 54650 7975018 3987510 83250 0 17829 288650672 3367497 2006-07 Quantity Value 1343262 203673413 170393 25827878 205425 23600591 165043 23453968 380266 20323958 150007 18253573 108900 16554505 71900 11668855 8607271 6291109 404786211 Arabia Bhutan 41100 Philippines 0 Total (All 1989535 Countries) 8236768 88734 2535284 67823 437563746 3097900 31 .
So. worth more than $31 billion.22 13.90 173.25 7. export of milk products from India is still in infancy.67 12.88 3.12 98.) 4. The reason being.Dairy Products Export Growth over the Years • Although.28 22.9 4.94 3.45 3.79 -35.14 78.18 233. but with the onset of ‘Operation Flood’ scenario changed and by early1990s milk products formed a part of India’s export basket.35 Percentage change -57. it is a very minor player in the world dairy trade.60 1. • During the last decade there has been high volatility in dairy exports from India. This can been from the table given below: Value of Exports of Dairy Products from India [Table 7] (1993-94 to 2006-07) Year 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 32 Value of Exports (US $ mn.67 -56.04 5.35 39. India is the largest producer of milk in the world. • Dairy products form only 0. accounting for a miniscule 0.79 -34. that India was a importer of milk products since 1970s.4% of total agricultural exports from India.13 11.06 .1 % of the world dairy exports. with growth in some years being more than 100% while in some years it has been negative.83 89.96 26.
72 87.62 291. especially in the new millennium.39 79.80 56.94 Even though export of milk product has been volatile.11 -29. But there is need for more consistency.89 124.2003-04 2004-05 2005-06 2006-07 • 20. Direction of Exports of Milk Products 33 .37 -22. but in the long run it has increased tremendously.
26 84.46 75. Bangladesh and U.23 87.16 77.29 98.60 82. but the average export to Asian forms 80% of the total dairy products exports.• The trend in direction of exports over the years indicates that Asia is the major destination of dairy products from India.39 79.88 73.12 81. • A table showing ‘Top Ten Countries according to their share in India’s Dairy Export’. are the top most destinations for our dairy products.79 58.86 83. Bangladesh has been the largest importer of milk products from India. In fact.13 98.47 75.63 %Share Value 93. This has been shown below: [Table 8] Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Overall Average Quantity 89.34 73.95 83.07 76.94 81.81 81.87 71.62 • Among the Asian markets. all the top importers from India are from Asia. • Although India exported dairy products to more than 100 countries over the period.77 84.77 79. over different time period has been prepared below: [Table 9] Ranks Sub-Periods (% share) 34 .46 82.A.67 68. except Egypt and Algeria.13 99.E. As can been seen in the Table 1.45 68.67 54.39 73.62 99. for the period 1994 to 2006.
4) Oman (4.4) 68.1) Bhutan (1.2) Nepal (10.2) Bahrain (1.16) China (4.2) Egypt (9) Algeria (7.8) Nepal (4.2) Kuwait (2.9) Sri Lanka (3.5) Oman (1.81 Composition of India’s Dairy Export • If we look at India’s dairy export composition.8) Yemen (4.1 2005-07 Bangladesh (20.4) Nepal (3.8) Singapore (1. Whole Milk Powder is also slowly picking but its share is still quite low.1) S. Ghee contributes around 10%.4) Oman (1. • While the above two products are dominating India’s export.1 2 3 4 5 6 7 8 9 10 Total Share of Top Ten Countries 1994-96 Bangladesh (39.2) Nepal (6.07) Pakistan (3.3) UAE (25) Philippines (12.9) Kuwait (1. one can easily find that Skimmed Milk Powder and Ghee has dominated the dairy export.3) 97. Korea (1. 35 .5) Yemen (3.7) 86.58) Saudi Arabia (2.1) UAE (10.7) Hong Kong (3.3) Saudi Arabia (2.5) Singapore (1. with Skimmed Milk Powder alone contributing 60-70% over the year.3) Bahrain (1) 94.7) Philippines (6.6) Sri Lanka (2.7) Thailand (2.8 2001-04 Bangladesh (39.8) Singapore (2. share of Cheese and Whey have increased over the period.3) UAE (21.7) Yemen (1.1 1997-2000 Bangladesh (38) UAE (29.9) Sri Lanka (8.
93 4.76 157.76 125.62 -0.37 0.46 407.73 1906.11 155.76 137.28 251.95 109.60 .74 22.99 166.40 6.Export Forecasts for 2010 [Table 10] Country Base Qty. (Tones) Saudi Arabia Oman Nepal Jordan Singapore Philippines 545 152. Change 5% Decrease in RPR % Forecasted Annual Qty.10 1. Change % (Tones) (Tones) Milk Powder and Cream Based Products 1659.75 9.53 448.90 110.49 289.79 100.47 -2.09 1.84 36 At Constant RPR Year Forecasted Annual Qty.82 27.25 7.89 135.2 281.01 0.
78 14.21 584.47 88.10 2479. • Forecasts show a marginal increase in India’s export to Jordan and Singapore.26 53.14 18.72 230. • According to the data given.37 3.61 82.98 4831.86 22.35 -4. Conclusion of the Forecast • This forecast has been done on the basis of existing situation as well as expected development over the next few years.97 19.46 62.14 5664.76 10 5. RPR stands for Relative Price Ratio. as there is going to be huge demand for milk products there.87 27.84 0.36 567.90 -1.77 -5.78 -3.88 61.30 4380.84 -4.56 154.76 100 36.72 19.15 65. there is going to be steep increase in export to Saudi Arabia by 2010.94 -3.51 0.41 814.56 27.61 359.35 89.77 53.98 42.28 8. Decrease in Relative Price Ratio means Indian products becomes relatively cheaper than the products of competing countries.72 29.88 7.75 18.78 4.Bangladesh Sri Lanka TOTAL Saudi Arabia Nepal Singapore Philippines Hong Kong Oman TOTAL Singapore Oman Nepal TOTAL 2749.80 7.09 -5.80 17.91 4.11 Ghee and Fat Based Products 344.22 78. • This information was prepared by Commerce Ministry of India in 2005.47 1981.40 19.64 118.4 Cheese 44.04 32.87 25.95 37.42 24.65 -5.22 1.66 -3.34 36.86 13.74 -4.46 86.19 7.78 Notes for Table 10: • • Base year Quantity has been calculated on the basis of four year average (200104).43 6. 37 .50 32.6 21.
• It is expected that export of milk powder and cream products from India to Philippines. Indian exports will decline due to large supplies of the product from Australia and New Zealand. ghee and other fat based products is likely to go up in Saudi Arabia and Nepal. Sri Lanka and Bangladesh will decline. the export volume is likely to suffer a decline due to their changing food habits. in Sri Lanka despite a compound growth of nearly 5 per cent per annum in import demand. 38 . • One can easily notice that there is going to increase in export of cheese from India and as said earlier it is due to shift in food habits of people. Even a 5 per cent decrease in price will not improve the situation. However. These markets are shifting towards Whey and Cheese. • India’s export for butter. For other countries. As far as Philippines and Bangladesh is concerned there has been decrease in domestic demand for this product.
These categories are: 1) Incessant: Those countries to which India has regularly exported. 3) New: Those countries to which India has started exporting recently. These categories have been shown in the table below: Incessant Bangladesh UAE Erratic Afghanistan Jordan New Taiwan Lebanon Unclassified Syria Cyprus Dropped Iraq Laos 39 .Analysis and Findings • As almost 70-80% of India’s export of dairy products goes to countries from Asia itself. Asian destinations can be classified into 5 categories on the basis of how consistent is India’s export to those countries. 2) Erratic: It includes those countries with whom India has highly volatile nature of exports. it is necessary to understand about nature of different countries. So. 4) Unclassified: Those countries who have exported from India only once in last 5 years. 5) Dropped: These are those countries with whom India do not traded for last decade or so.
53 0.7 6.Nepal Sri Lanka Oman Bahrain Bhutan Singapore Kuwait Pakistan Japan Qatar Indonesia Maldives Vietnam North Korea Myanmar Kazakhstan Macau Cambodia Uzbekistan • Almost all the exports of dairy products from India is limited to Asia and Africa. The reason for this can be attributed to two things: 1) Indian dairy products are not price competitive.19 40 .40 0. only Nepal and Bangladesh are two countries where India has market share of more than 1%. India’s share in dairy export is quite low. high subsidy provided to dairy farmers by the government making milk products cheap. 2) High standards set by these countries makes it difficult to make inroads in there. The reason being. This has been clearly shown in the table below: Country Nepal Bangladesh Oman UAE Bahrain Saudi Arabia Skimmed Milk Powder Share of India (%) 13. which forms almost 70% of India’s export.61 0. i. Indian products are priced higher than the products from European Union and America.91 0. • Even within the Asia and Africa. The main reason again being price competitiveness. in case of Skimmed of Milk Powder. For example.e.
who is already a big consumer of milk products. • Whey. China is fast emerging as big market. with continuous increase in consumption of milk products. This is the reason for India having nearly 10% share in Oman and Bahrain in the category of fat based milk products. and with a large population under the age of 20 years this consumption is going to increase further. and it has affected India’s export badly as Bangladesh was India’s dairy product biggest Importer. Its export to Bangladesh has reduced considerably over the last three years as shown in Table 1. • There are many countries which have potential to become importer of milk products. especially in Middle East Asian countries. • India is facing tough competition in the Asian market to maintain its market share. The most important region emerging is Middle East. where India is fast making progress in terms of exports. which was since few years back was not part of India’s export has shown good growth over the last couple of years. and it is expected to increase further with increase in use of whey for commercial purpose. Its export to Algeria and Nepal has also suffered. Other than this India’s milk product export overall has also been volatile over the years. India gets a preference as she does not have much competition and there is also demand for this product. • As far as Ghee is concerned. and it is expected that China will need to import more due to inadequate local supply.• In case of cheese also. the reason mainly being increase in per capita income of people in most countries. 41 . The only problem for India is that it is out competed in price by rival countries in nearly all the countries except Nepal.
South & North Korea. Cheese and Whey will be in the commanding position. Israel are some of the emerging markets. It is expected that in times to come there will be more demand for product having unsaturated fatty acid. • Besides supply constraint. thereby making Indian Dairy products more competitive. • In recent years. more protein etc. India has found some new markets in South and East Asia and in the Gulf regions. Indian products are price competitive in some of the markets but are not preferred due to the poor quality. thereby replacing fat based products in South and East Asian markets. but our product is still more expensive. 42 .• Due to changing food habits of people there will also be shift in the demand for different dairy products. • Another big problem facing Indian Dairy export is that. • Under WTO regime European Union had to reduce subsidy provided by it to dairy farmers. China. Lebanon. • Positive for India in dairy exports is in the case of whole milk powder which has seen healthy growth over the last few years and this is expected to continue with increase in the consumption in the Middle East Asian countries. Myanmar. and so production of value added dairy products is low and this poses a supply constraint on Indian Dairy exports. quality is also a hindrance. only 15-20 per cent of the milk produced in the country flows through the organized sector. due to lack of latest technology.
There is always a higher chance of succeeding in a new market as competition will be equal or if taken initiative exporters can have advantage being the first. so that Indian products can be said to be reliable. This will also help in improving the quality of goods produced. • Indian exporters should diversify the product range offered by them to capture new markets. • More milk should be procured by the organized companies. thereby making Indian Dairy Products cheaper and more competitive as far as price is concerned. • Other than existing market Indian exporters should keep looking for new markets for exporting. If we continue as the present situation is then it will be difficult for India to increase its export. 43 . as these are the companies who are involved in export and until they do not procure more milk it will pose supply constraint for the dairy exporters. as well as. This will help in reducing the cost of goods. Today’s small market can be big money earner tomorrow. to cater to the changing taste of the existing markets. • Latest technology should be used for the purpose of production.Recommendations • If Indian exporters have to be successful they have to streamline the quality and have to attain a minimum level of standard.
• Another area where Indian exporters can target there product is the Indian Diaspora of around 20 million living abroad. including commercial uses. China is a big market and with expectation of demand outstripping supply by big margin in near future exporters should prepare themselves for this market. Besides. exporters should understand the need of Saudi Arabia and prepare for it. Indian exporters should pay special attention to this product. 44 . To overcome this problem professionals should be hired who have the knowledge of international dairy market and can make right strategies for marketing the product. there is potential to popularize these products among local consumers abroad. So Indian exporters should also pay attention towards export of this product. • Consumption of cheese is increasing at a fast pace and this trend looks to continue for next few years as income of people in this region increases. This will help exporters gain inroads there. half of them in the West. mainly China and Saudi Arabia and some other Gulf region countries.• Indian exporters should pay special attention to new markets. • Another important aspect that has to be kept in mind is how we market ourselves in the international market. • The demand for Whey is increasing quickly as it has different uses. Similarly.
Bibliography • • • • • • www. like buffalo.aifpa.net Ministry of Commerce 45 . as milk from different cattle.stc. cow and goat are used together to produce milk. This is should be done away with.gov.in Apeda Dairy Year Book Modern Food Processing Magazine www.• There is adulteration in case of milk powder.