India set to play a crucial role in butter market

NEW DELHI: India will continue to maintain self-sufficiency in butter, says an European Commission report. The commission’s agri-trade policy report, which predicts the outlook till 2016, says India will see high growth rates in the milk products’ output and consumption in the coming years.

Butter production in India is growing at 12% annually. The output has increased to 5.7 lakh tonne in 2004 from 1.3 lakh tonne in 1991, according to the report. India is the world’s largest butter producing country. Russia would remain the biggest butter importer, it said.

The report also said EU’s butter export market share will drop by 16% to 22% in 2015 from 38% in 2005. “The EU’s dairy exports continue to contract as a result of fixed production quotas and increasing internal consumption,” the report said.

On the skimmed milk powder (SMP), whose export is banned in India till September, the report said EU will lose the global market share from around 25% in 2004 to 15% by 2014, while there is divergent views on the US share.

The US, the world’s largest exporter of SMP since 2005, will increase its market share says Food and Agricultural Policy Research Institute (FAPRI), while the Food and Agriculture Organisation says the share in export market will come down.

The SMP prices would be 40% higher in the next decade, the EU report said, adding the Philippines and Indonesia would be the major importers.

Commenting on the prospects of the overall dairy products sector, it said: “Globally, the sector is expected to grow moderately over the next 10 years.”