Milk powder no cash cow for KMF, drains its resources

Milk powder business, which had once brought profit to KMF, is currently choking the cooperative union.

As against the normal daily consumption of 55 lakh litres per day, KMF is currently receiving a whopping 80 lakh litres. The bulk of the remaining milk is converted into powder and stored in various milk unions across the state. What has left KMF worried is the plummeting price of milk powder at the global level and refusal by the overseas market to help sell the powder.

According to sources, a kg of powder costing Rs 270 is now priced at a mere 130 per kg. KMF incurs a cost of Rs 200 to produce one kg of milk powder. “As fodder for cattle is in abundance following good rain, milk production is on the rise. We have been in talks with private firms to sell excessive milk and milk products,” Rakesh Singh, managing director of KMF said.

This is the third consecutive year that KMF is witnessing poor response for its powder, especially from European markets. While it had scraped through in the last three years owing to prolonged drought that helped clear some of the milk powder stock, this year the situation is worse.

A senior official said KMF produces 180-200 metric tonnes of milk powder every day from the leftover milk.

“Even though much of the milk is converted into powder at plants belonging to our union, some quantity is sent to other states to be converted into powder. But what is
turning out to be a daunting task is finding a suitable place to store the powder,” the official said. Currently, almost all milk unions have stored milk powder exceeding their actual capacity, despite the export of powder to Bangladesh, and finding markets in neighbouring states.

“The shelf life of milk powder is only 12 to 18 months. Some quantity of milk is also converted into butter,” said an official. KMF has bagged one of its first contracts abroad for its traditional ‘Nandini Ghee’ and delivered the first consignment to the Middle East and Southeast Asian countries.

KMF, just a few days ago, shipped the first consignment of 1.2 tonnes of pure cow ghee to Qatar, Oman, UAE and Singapore. It is awaiting feedback. “Nandini Ghee has widely been appreciated, not just by Indians in these countries, but native residents also,” said a senior officer of KMF. The ghee, trusted by the Tirumala Tirupati Devasthanams Trust, is liked for its texture, aroma and pricing.

“European countries have an edge in the market. But considering the quality of our products, we can easily tap the market. The Middle East will be our biggest market,” said another KMF official.