BSE LiveJul 14, 16:00
Bid Price (Qty.)
Offer Price (Qty.)
NSE LiveJul 14, 15:48
Bid Price (Qty.)
Offer Price (Qty.)
World over, dairy is serving over 7 billion consumers, providing livelihoods for approximately 1 billion people. Reformist Policies of Government of India has strengthened the progress path of the Dairies in India. Over the past decade, India has seen a substantial rise in per capita income and purchasing power parity and more accessible Dairy market.
Indians are becoming more health and product conscious, embracing milk-based products for health related matters. The increasing preference for value-added milk products has also fueled demand for milk production. Aging population in India view milk as a vital protein source and approximately 29% of the India’s 1.2B population is vegetarian, makes milk and milk-based products highly sought-after sources of protein.
As the world leader in milk production, India’s imports are minimal. In 2017-18, India exported 39,556.55 MT of Dairy products worth an estimated Rs. 94,202.38 Lakh to major export destinations namely Bangladesh, Pakistan, UAE, Singapore and Nepal. India’s share in the global milk trade has historically been low, due to limited quantity available for exports, after accounting for domestic demand; regular bans on export of high-volume products like milk powder by the Government and uncompetitive pricing of Indian Dairy products in global markets.
According to the latest statistics published by the United Nations Food and Agriculture Organization (FAO), per capita milk consumption has reached 85 kg or 2.2 times the 1980 level, indicating forward growth going. The Indian Government has predicted that milk consumption in FY 2023 (April 2023-March 2024) will be 1.7 times higher than the FY 2015.
Indian Dairy farming is manifested in low productivity. An International comparison based on FAO statistics shows that milk production per head of cattle per day amounts to 27.8 kg in the United States and 22.5 kg in Japan (2014), compared with just 4.0 kg for a Dairy cow and 5.2 kg for a buffalo in India. Longer term growth in the country’s milk production sector will depend largely on herd restructuring. To keep pace with future growth in demand, the Indian Dairy Industry needs to improve productivity on priority. Productivity improvement measures under National Action Plan for Dairy Development include the introduction of exotic cows, cross breeding and the improvement of nutrition and hygiene of folk. The Plan aims to increase daily output per cow to 7.1 kg by FY 2023.
Between December 2016 and December 2017, international price of SMP slumped by 20% and now stands at 1800 US$ per ton from a high of 2850 US$ per ton in March 2016. The comparative price of AMF fell by 10% and now stands at 3485 US$ per Ton. The prices have reached a low level equilibrium, lowest compared to past many years. The slump in international prices is essentially due to reduction in imports by few major consuming countries in the world. China, the world’s biggest Dairy importer, imported 40% less this year. The traditional large importer, Russia, reduced imports by 30%. Reduction in World trade of Dairy commodities had a cascading effect on the major exporting countries, leading to reduction in producer prices of milk. Reports indicate that in New Zealand, milk prices paid to their milk producers declined by 40% during past 2 years and in EU milk prices to the producers fell by 25% during the above period. Many countries and Governments are devising innovative ways to handle the crisis. Indian Government has also accelerated steps to provide Rs. 8,000 Crore (US$ 1.2 Billion) budgetary supports during financial year 2018-19, to improve dairies and economy of Milk Producers and to adopt modern technologies for improving quality of Milk and Milk Products.
The Company has evolved massive infrastructure to encompass systems and processes, designed to safely transport and sustain Dairy products and to create better market linkages. This trend is indicative of the tremendous future opportunity for our Company.
The company has transparent strategy, a strong vision, robust values and a team of experienced employees. We are progressing systematically to achieve our Goals by sticking to our strategy and continuing to invest for modernisation of our plants as also our existing leading brands. Our devout readiness to proactively reshape our business to cope with new challenges will definitely result in sustained growth and long-term value creation for everyone associated with the Company.
Kwality takes quality and food safety very seriously all along the supply chain. Every product has to pass very stringent quality standards before being released for the market. The reality is that At Kwality we treasure this trust always and every time.
Our Success lies in having our strong bonds with the Milk Producers, Our Employees, Dealers, Distributors, Ultimate Consumers and finally the Investors. This role foundation is writing success stories for Kwality Limited in short span and shall continue to write new success stories in future to grow further in Dairy Sector. We will continue our whole hearted support for social upliftment initiatives for Milk Producers, affirmation for checks on adverse environmental impacts, modernization of Units and Employees safety, apart from continuous support to Milk Producers by providing affordable Animal feed and veterinary services.
We are confident to continue our success journey with transition in our business mix and business sustainability. I thank all my Stakeholders, who always stood by us not only in journey of value creation but also in hard times of crisis.
Dr. RATTAN SAGAR KHANNA