In a memo, the Indian Ice Cream Makers Association (IICMA) predicted that the cost of ice cream would almost double as the cost of raw materials and a secret ingredient named SMP (Skim Milk Powder) soared. .
The agency in a note exposed its fear and the market conditions. Rajesh Gandhi, President of IICMA, said: “It would be very helpful if the import of skimmed milk powder (SMP), whole milk powder (WMP), butter and butter oil (fat) was under duty-free regime as the non-availability of the stock is going to affect the entire ice cream and frozen desserts industry of India”
Commerce Ministry data shows that imports of skimmed milk, bearing the 8-digit HS code (04021010), fell to Rs 530.98 lakhs in FY2019 from Rs 1,572.07 lakhs a year ago. one year old. The drop in imports can be attributed to the cost of the secret ingredient which has almost doubled. Data from the association shows that the cost of SMP has risen from an average of Rs 150 per kilo in 2018 to almost Rs 330 per kilo. The association adds that India’s exit from RCEP resulted in an increase in SMP of Rs 20 per kilo. IICMA believe the situation could worsen during the summer season, implying that a scoop of ice cream could turn into a lavish proposition.
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In addition, the two-month monsoon delay and damage to crops and fodder also led to a 10-15% reduction in milk and dairy product purchases.
Besides an imbalance between supply and demand, the IICMA highlighted some fears for the industry, here are some of them:
1. Rampant tampering in the SMP.
2. Many ice cream makers may be pressured to close resulting in a loss of GST to the government.
3. Smaller manufacturing companies and more expensive SMPs could further increase the cost of ice cream. There are also fears of job losses due to the closure of factories due to the volatility of supply and demand.
In a note, IICMA proposed the creation of a buffer stock of 65,000 MT which could be used to stabilize the domestic market and thus maintain/reduce prices to acceptable levels. “In times of glut when prices fall below remunerative levels, the government can step in to buy SMP and use the buffer stock to provide market stability to protect farmers’ interests. In this way, the price of milk and SMP can be maintained within an acceptable price range thus taking care of the interest of farmers and consumers and thus creating a win-win situation for all stakeholders. should be created in mid-February and widely publicized in the media so that hoarding of SMP by manufacturers and traders is strongly discouraged,” IICMA added in a note.
The agency further said, “IICMA has therefore also requested the Honorable Minister to immediately arrange the import of 65,000 tons of SMP which can start entering the country within approximately 45 days so that the stocks are likely to be available in the country by mid-February 2020. And the ice-cream makers do not have to deal with a situation like in the case of onions where the intervention came too late and the Prices had already reached very high levels before imports were organised.”
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