New Delhi, Feb. 17 The Centre is said to be considering allowing imports of up to 30,000 tonnes of milk powder at zero duty under the tariff rate quota (TRQ) regime.
The present TRQ arrangement permits powder imports of up to 10,000 tonnes at five per cent duty during a financial year (April-March), with quantities beyond this attracting 60 per cent tariff.
The “in-quota” imports at concessional duty are , moreover, subject to the actual user condition and can be routed only through the National Dairy Development Board (NDDB), National Cooperative Dairy Federation of India and parastatals such as the STC, MMTC, PEC and Nafed.
According to sources, the proposal now under consideration is to raise the ‘in-quota' quantity from 10,000 to 30,000 tonnes, while simultaneously reducing the import duty on these from five to zero per cent.
It is also proposed to allow import of 15,000 tonnes of butter oil at zero duty through NDDB and various cooperative dairies. Currently, the import duty on butter oil is 30 per cent.
The Centre's latest moves come in the wake of dairies, particularly in the North (which includes NDDB's own subsidiary, Mother Dairy), experiencing shortfalls in milk procurement.
The impact of inadequate procurement is expected to be felt acutely during summer, when milk production tend to dip even in the natural course. “They are looking at import of powder for building a reserve that could take care of potential lean season shortfalls,” the sources noted.
In fact, NDDB/Mother Dairy are learned to have already contracted some 2,550 tonnes of milk powder from the Irish Dairy Board at an average $2,700-2,750 a tonne.
Imported powder of New Zealand origin is currently available at $3,000 a tonne, while being $2,700 for subsidised European material. “Inclusive of Rs 2-3 freight, the importer powder would cost about Rs 130 a kg against domestic prices of Rs 140 a kg,” the sources said. In the case of butter oil, an estimated 20,000 tonnes of imports were undertaken by private traders during 2009 at around $2,000 a tonne. Prices have since firmed up to over $4,000 a tonne, but imported butter oil, at Rs 190-192 a kg, would still be cheaper relative to the Rs 225-230 realisations on ghee by domestic dairies.
NDDB had earlier sought a ban on export of dairy products (including casein), with the issue even being discussed at a meeting of the Cabinet Committee on Prices last month. But with sections within the Government opposed to the move, the focus has apparently now shifted from restriction of exports to liberalisation of imports.
Source : Business Line