Govt bans export of milk powder, casein to rein in prices

New Delhi, Feb 18 (PTI) India, the world''s largest milkproducer, today banned exports of milk powder and itsderivative casein to rein in rising prices in the domesticmarket.

The ban, announced by the Commerce Ministry, will comeinto effect immediately and will be valid till "furtherorders".

Milk prices have risen by about 20 per cent in the retailmarket and by 12 per cent at the wholesale level in the lastone year, adding to the food inflation which is well into thedouble digit.

Food inflation was 11.05 per cent for the week endedFebruary 5.

"The export of milk powders (including skimmed milkpowder, whole milk powder, dairy whitener and infant milkfoods), casein and casein products has been prohibited andhence not allowed to be exported till further orders," saidthe Directorate General of Foreign Trade (DGFT).

The decision came a day after an Empowered Group ofMinisters, headed by Finance Minister Pranab Mukherjee,reviewed the price situation of commodities.

The government last month had withdrawn export incentiveson these products.

India exported milk powder and casein worth Rs 500 crorelast fiscal.

Reacting on the move, Managing Director of GujaratCo-operative Milk Marketing Federation Ltd -- which sells milkunder ''Amul'' brand -- R S Sodhi said the decision would helpcontain the prices.

"Looking at the current scenario it is a good decision asthis would help improve availability of milk and keep pricesunder check,'' Sodhi said.

However,he said the government should review the decisiononce the prices stabilise.

India''s annual production of milk was 112 million tonne.

In an another notification, the DGFT said that onionexports are allowed through state trading enterprises (STEs).

"The export of onions is now allowed through STEs subjectto applicable minimum export price (MEP) depending upon thevariety of onions," it said.

The decision came after farmers'' protest over crash indomestic prices within two months of touching Rs 80 a kg.

The onion shipments were allowed at a MEP of USD 600(About Rs 28,000) per tonne.

It also said that export of onions in cut form, in slicedform and broken in powder form has been made freely exportablewithout any MEP.

The government had banned onion exports in the lastweek of December, 2010 to augment domestic supply and containrising onion prices, which had touched Rs 70-80 per kg.

The measure, along with action against hoarders andarrival of fresh crop, led to crash in prices to Rs 4-12 kg inthe wholesale, leading to protests in Nashik and other growingareas of Maharashtra.

In the retail markets, onion prices are ruling at Rs 20-25a kg.

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