India’s dairy farmers are hoping to take advantage of the contamination scare in New Zealand to boost their exports to China and other emerging markets.
The Kiwi’s Fonterra, the world’s biggest dairy exporter, said last week that a dirty pipe in one of its plants may have tainted whey protein with a bacteria that causes botulism, a potentially fatal food poisoning. The news prompted recalls in China, Vietnam, Sri Lanka, Thailand and most recently Singapore. New Zealand’s government has expressed concern that the growing recalls would prompt China to extend the ban on milk powder to other dairy products from the country.
New Zealand accounted for 90% of China’s $1.9 billion milk powder imports last year. In comparison, India, the world’s largest milk-producing country, managed exports of just $230 million last year.Indian farmers would like to have more of that.
Part of the reason India exports so little milk is because the government keeps a lid on exports to ensure that domestic prices remain low. But with increased production—milk output is forecast to rise 5% to 133 million metric tons—slated to outstrip domestic demand, which is pegged at around 128 million metric tons, there is no reason to restrict exports.
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