Why Gujarat Has Massive Stock Of Milk Powder

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The News

Milk cooperatives in Gujarat are finding it difficult to sell the 90,000 metric tonnes of skimmed milk powder, worth Rs 1,850 crore, they have in stock.
Gujarat government has come forward to offer an export assistance of Rs 150 crore which will provide Rs 50 for every kilogram of milk powder exported by the cooperatives under the Gujarat Cooperative Milk Marketing Federation (GCMMF) which sells milk and milk products under the Amul brand.

Export the Milk Powder..!!
According to GCMMF, the surplus quantity of milk powder can be exported.
Despite the low prices, 60,000-70,000 metric tonne of milk powder gets sold every month in the international markets.

The cost of manufacturing milk powder is Rs 250-260 per kilogram.
In the domestic market, the demand for milk powder picks up only around April when ice cream and biscuit manufacturers buy milk powder in large quantities to tide over the milk shortage.
If GCMMF sells now, the milk cooperatives will book a loss, as the domestic prices of milk powder is Rs 160-170 and international prices are around Rs 190 for a kilogram.
With the state government stepping the losses can be averted.
The assistance being provided by the state government for exports begins in November and will continue for six months till April 2021.

GCMMF is targeting to export 50,000 metric tonnes of milk powder in 2020-21.
In 2019-20 due to poor demand only 12,000 metric tonne got exported.
Milk powder from the state is exported to 50 different countries, most to the middle-east, Africa, south-east Asian nations and even to our neighbours including Afghanistan, Bangladesh and Pakistan.