Concerns in India over possible ice cream price hike

By Jim Cornall contact

- Last updated on GMT

The IICMA warned of several negative impacts of reduced SMP supply. Pic: Getty Images/Ram Tekale
The IICMA warned of several negative impacts of reduced SMP supply. Pic: Getty Images/Ram Tekale

Related tags: India, Milk

Ice-cream and frozen-dessert manufacturers in India are facing difficulties in finding skimmed milk powder (SMP), as stock is not available in the market and there is sudden hike in its unit price.

SMP is one of the vital ingredients in the making of ice creams and frozen desserts in India.

The IICMA (Indian Ice Cream Manufacturers Association) said from January 2019, the average cost of SMP was Rs. 180/kg ($2.53), to the current price of Rs. 330/kg ($4.64). This compares to the average current international SMP cost of Rs. 200/kg ($2.81).

Members of the IICMA said that even after paying the current rate of Rs. 330/kg in India, ice cream manufacturers are still facing a shortage of SMP.

IICMA said that due to the extended rainy season of two months in the country, there was damage to the crop and fodder, which resulted in the reduction of procurement of milk and milk related products by 10 to 15%.

The IICMA added that if the current situation persists a steep price hike may result in rampant adulteration in SMP. There is also the danger of the closure of some ice cream and frozen dessert companies, and of job losses.

The organization also warns the price of ice-creams and frozen desserts may rise, and there may be a slow down in production.

The IICMA said it has proposed the creation of a buffer stock of 65,000 MT by mid-February, which would be used to stabilize the market to maintain/reduce prices within acceptable levels.

President of the IICMA, Rajesh Gandhi, said, "The demand and necessity of current time is economic liberalization such as dairy sector to be made open for global market by allowing it for import and export. As this would not only give chance to export but will encourage many people toward animal husbandry occupation and ultimately would be helping in increasing yearly income of farmers.

"It would be great help if the import of SMP, Whole Milk Powder (WMP), butter and butter oil (fat) would be under duty free scheme as non-availability of the stock is going to affect the whole ice cream and frozen dessert industry of India.”

The Indian Ice-Cream Manufacturers Association was founded in 2011 as the National Association of Ice Cream Manufacturers. It is a professional non-profit organization to ensure the success of the ice cream and frozen desserts industry in India.

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