India to Export More Dairy to ASEAN

July 12, 2013 Posted by India Briefing Reading Time: 2 minutes

Jul. 12 – As the demand for dairy products increases from the member nations of the Association of Southeast Asian Nations (ASEAN) , India’s dairy sector seems poised to fill the gap, and can expect a large bump in its milk exports to the region in the near future.

Milk consumption throughout the ASEAN region, especially throughout the ASEAN six majors – which is made up of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – has gone up in recent years thanks to increasing birth rates, improving diets, rapid urbanization and an increasingly health-conscious middle class in the countries. As a result, these countries have been increasingly dependent on the import of dairy products.

“Across Asia, India is the only country with surplus milk. Above all, [India has] the location advantage to cater to the Southeast Asian market,” noted R S Sodhi, Managing Director of Gujarat Cooperative Milk Marketing Federation, which produces India’s Amul milk brand.

Indian skimmed milk powder (SMP) reportedly costs around US$3,450 a ton. In comparison, competing nations such as Australia and New Zealand charge between US$3,550-US$3,650 a ton.

“We expect dairy consumption across the ASEAN-6 to grow 2.4% a year through to 2020. This creates a requirement for an extra three billion liters of milk,” said Michael Harvey, analyst at Australia-based food bank Rabobank.

Indian SMP exports to the ASEAN region is currently 5000 tons a year, but this number is expected to jump to over 10,000 tons by the end of this year. India’s total milk powder exports are likely to touch 100,000 tons this year.

The Indian government lifted the ban on the export of milk powder just last June. This development comes off the heels of recent news that Australia and New Zealand have been gunning to fill the milk export void in the ASEAN region.

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