SAARC OILS & FATS TODAY- June issue by Media Today Pvt. Ltd.

june 2012, SAARC OILS & FATS TODAY

SAARC OILS & FATS Today, june 2012

june 2012, SAARC OILS & FATS TODAY

Contents Chief EDITOR S. Jafar Naqvi Consulting Editors T.V. Satyanarayanan K Dharmarajan Editorial Co-ordinator: Syed M K News Editor : Anwar Huda General Manager: Lalitha V Rajan

v Editorial

v Cover Story l Letter to Gujarat CM IOPEPC wants storage limit waiver l Exhibitions: A dependable tool to boost Oilseeds Export

v l

Dairy Indian Dairy Sector Market efficiency is key to success — R.S. Khanna and Sharad Gupta

Production: Mohd. Iqbal Hyderabad 9248669027 mediatodayhyd@yahoo.com

l Indian dairy: constraints & solutions — Rana Kapoor

Mumbai 9702903993 mumbai.office@mediatoday.in

l Sustainable Dairy Business Herbal feed supplements to raise productivity — Dr. Prashant N. Patil

Bangalore 9342185915 bangalore.office@mediatoday.in

v GM Technology Bt cotton: Good, Bad or Ugly?

Pune 9881137397 pune@mediatoday.in Ahmedabad 9727866249 ADMN. & MARKETING OFFICE MEDIA TODAY PVT. LTD. T-30, 1st Fl., KHIRKI EXTN., MALVIYA NAGAR, NEW DELHI - 110017. PHONE : 91-11-26681671, 26682045 TELEFAX : 91-11-26681671 E-mail: MediaTodayMails@gmail.com ANNUAL SUBSCRIPTION India: Rs.1000/-for 1 Year / Rs.1950/-for 2 Years Overseas: US$ 120 for 1 Year / US$ 230 for 2 Years Single Copy Cost in India : Rs. 60.00 Printed, Published & Owned by M.B. Naqvi, Printed at Everest Press, E-49/8, Okhla Industrial Area, Ph-II, New Delhi -110 020 and published from E-11/47 -A, New Colony, Hauz Rani, Malviya Nagar, New Delhi-110017 (India). Editor : S. Jafar Naqvi

Vol. 14..... ISSUE 9..... June 2012 ‘Saarc Oils & Fats Today’ T-30, Ist Floor, Khirki Extn., Malviya Nagar, New Delhi - 110017 E-mail : MediaTodayMails@gmail.com

SAARC OILS & FATS Today, june 2012

View Point Bt Brinjal…No!No!, Bt Cottonseed Oil…Yes!Yes! Whither policy on GM crops? —Anwar Huda

l There is strong case for revising tariff value for imported vegoils — G. Chandrashekhar v Feed Technology O. H. Kruse Feed Technology Center to be ready by mid-2013

v Award Nichrome wins IPMMI Design Development Award

v Packaging Are you using safe food & beverage containers?

v News

Editorial While India’s flood of edible oil imports is swelling year after year, the soft oils imports basket is witnessing a change in its composition, mainly because of varying price differential. The figures compiled by Solvent Extractors’ Association of India (SEA) for the first half of this Oil Year (Nov 2011-April 2012) would bear testimony to this change. Two emerging trends evident in these figures are, first, a substantial rise in the import of sunflower oil, and secondly, the entry of canola oil for the first time in the import package. In all 56,000 tonnes of canola oil have been imported in three months up to April. Canola oil import is attributed to lower crushing of rapeseed being sold at higher prices in the domestic market. The import picture of soft oils shows sunflower oil’s continued dominance, the figure being 6.07 lakh tonnes, out of a total import of 11.29 lakh tonnes of soft oils in the current oil year. In the corresponding period last year, sunflower oil edged out others in this category, accounting for 4.12 lakh tonnes, in a total of 7.85 lakh tonnes. Soya oil, which held sway earlier, is lagging behind. Taking oil imports as a whole – soft oils and palm oil – it is clear that the inflow is getting bigger and bigger. The total imports during November to April have gone up 30 per cent, compared to the corresponding period last year. The palm group -- comprising crude palm oil, RBD palmolein, crude olein, and crude palm kernel oil -- constituted 75 per cent of the total edible oils import of 34.73 lakh tonnes in six months. Import of RBD palmolein rose by 89 per cent. The imports are spurting, not only in quantitative terms, but in value terms as well, and the weakening of the rupee vis-a-vis the dollar is making the position much worse. Two major heads accounting for the large

import bill of the country are petroleum products, followed by edible oils. The trade deficit of the country in the last fiscal was already 185 billion dollars. All this, once again, underscores the urgency for stepping up the production of domestic edible oils, by giving a major boost to cultivation of domestic oilseeds. The 12th Plan has now started and planners and policy makers have been for long promising a thorough overhaul of the farm strategy to suit changing consumption needs. One hopes the oilseeds sector gets specific attention in the formulation of new schemes. More funds need to be allocated for research as well as extension activities to take the fruits of research to the farmers’ fields. This country has many innovative and progressive farmers, who are always willing to adopt new technologies and varieties, provided they are convinced about their viability. Interestingly, there are also farmers who have the competence to develop new crop varieties that can out-yield traditional varieties. A news report from Gujarat recently publicized the work of a groundnut farmer, who is credited with having developed a new variety, which has high oil content and is resistant to stem- rot. The farmer has distributed seeds of this variety, “Dhiraj 101’, to farmers in groundnut growing districts of Saurashtra region and has received encouraging feedback from them. True, such efforts, though important, are just a speck in the horizon. What we need is a comprehensive public-private sector partnership effort on a big scale, involving all stakeholders to make the elusive Yellow Revolution a reality. The main focus of action should be rain-fed areas -- drylands as they are called – which contribute more than 80 per cent of the oilseeds and pulses produced in the country.

Comments are welcome at: MediaTodayMails@gmail.com Views expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “SAARC Oils & Fats Today” editorial board. The magazine does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor

june 2012, SAARC OILS & FATS TODAY

Cover Story

Letter to Gujarat CM

IOPEPC wants storage limit waiver

pset with the recently imposed quantitative limit on storage of oilseeds such as groundnut and sesame seed, exporters have represented to the Gujarat Government to remove the storage restriction. On April 5, the State Government fixed 200 tonnes as the stock limit for oilseeds and oils. In a representation to the Chief Minister, Narendra Modi, the Indian Oilseeds and Produce Export Promotion Council has pointed out that the rise in prices of various oilseeds and oils, including groundnut oil, was primarily the result of a rise in international prices of vegetable oils and the weakening rupee against the dollar. Difficulties due to notification Expressing concerns about the Notification No GTH/10/ ECA/10/2012/837697/B date 5th April, 2012 issued by FOOD, CIVIL SUPPLIES AND CONSUMER AFFAIRS DEPARTMENT, Gujarat, the letter said, “By this notification, the government of Gujarat has introduced Storage restriction of maximum 200 MT for Edible Oil seeds and Oil”. “The matter was also brought to your kind attention even earlier”. The Rabi Groundnut and Sesame seed crop is expected to arrive in next 1015 days in the markets. The Groundnut

The Council wrote that considering the restriction on storage of oilseed, exporters from Gujarat will find it difficult to participate in Korean tender process. This will help competing exporters from other states who do not face any quantitative restriction. Due to this, the exporters could shift their base from Gujarat and relocate themselves in other states. crop in Gujarat during this Rabi season is expected to increase by 56% reaching a level of over 4.5 Lakh tons. This can be attributed to the good prices offered to the Groundnut farmers in Gujarat. The imposition of Storage Control would result in limited buying from farmers. Thus, the farmers will not get the right price for their produce. Real reason behind price rise The share of Groundnut oil in total edible oil consumption in India is only about 3%. The recent rise in oil prices can be attributed to the fact that globally edible oil prices have increased by about 10% coupled with Indian rupees weakening by about 10% during the past four months. This has had impact on imported oil prices. As India imports over 60% of its edible oil consumption, exchange rate and overseas prices play an important role in

domestic oil prices. The price of edible oil and exchange rate are provided below for quick referral: The letter further said, “It is also a fact that the prices of all commodities are moving in tandem with the global prices. For example, groundnut oil price in Rotterdam (ex tank) is about US$ 2200 per MT equivalent to Rs 1,18,800 per ton which is at par with the price of groundnut oil in India”. The Groundnuts which were earlier considered to be an oilseed and used for crushing is now being considered as a snack item and is used for edible purpose. It is estimated that almost 75% of the Groundnut usage is as Table Nut (Khari Sing). Importance of sesame seed exports Emphasizing the importance of sesame seed exports, the Council wrote, “Sir, we

Date

S B Crude CPO Crude (USD) (USD)

6.2.2012

1220

1035 65200 55800

7.3.2012

1260

1095 68000 58500 50.6

7.4.2012

1325

1195

72500 65500 51.5

4.5.2012

1280

1160

73000 66500 53.7

SAARC OILS & FATS Today, june 2012

SB Palmoline REF (IRS) (IRS)

Exchange RATE (RS/USD) 48.8

Cover Story would like to inform you that India is the single largest exporter of Sesame seed in the World accounting for a share of about 20% of world Sesame trade. Exports from Gujarat contribute large share in overall exports of Sesame seeds from India and over past ten years several world class factories have been established in Gujarat to cater to Sesame seed export”. Exporters from Gujarat have been very active in supplying large quantity of Sesame seed to the world market. India is also a major supplier of Sesame seed in South Korea by way of participating in the Tender floated by South Korean Government Agency. Quality standards of Sesame seed in Korea are high and Sesame seed from Gujarat state is most suitable to meet their requirement. Several times in a year, Korea purchases quantities of 5000 to 12000 tons at a time through public tender and over 95% of quantity is procured from Indian exporters and shipped from Gujarat ports. It is a matter of pride that large portion of Korean business is attained by exporters from Gujarat and these exporters contract from 600 tons (which is minimum requirement by Korean Govt) upto as high as 4000 to 5000 tons on each tender. Fears of losing overseas markets The Council wrote that considering the restriction on storage of oilseed, exporters from Gujarat will find it difficult to participate in Korean tender process. This will help competing exporters from other states who do not face any quantitative restriction. Due to this, the exporters could shift their base from Gujarat and relocate themselves in other states. This is more crucial especially at this time when the worldwide demand is slow and buyers are hesitant due to volatile economic and currency situation. So it is necessary that the exporter and suppliers supplying oilseeds to exporter community should not face any quantitative restrictions on storage. We earnestly request you to kindly take necessary action to support oilseeds sector in Gujarat by way of revoking the quantitative restrictions imposed on the storage.

IOPEPC presents Rabi Crop Survey 2012 To keep its members abreast of the latest information to enable them to plan out their activities well in advance, Indian Oilseeds and Produce Export Promotion Council (IOPEPC) conducted the Rabi Crop Survey 2012 in Gujarat during 28th April and 03rd May. The findings of this crop survey were presented during the Regional Meet on 05th May in Rajkot. The meeting was attended by more than 275 persons from the oilseeds and oils trade and industry. Rajesh Bheda, Chairman, IOPEPC, delivered the Welcome Address. While addressing the gathering, the Council’s Chairman said, “The insight into the quality of groundnut and Sesame seed is considered to be of immense importance from the export perspective as the exporters can plan their effective export strategy considering the quality of Groundnut and Sesame seed being harvested and the requirement of importing countries”. He added, therefore, in order to assess the area under cultivation, yield, productivity and quality of Groundnut and Sesame seed, the Council conducts crop survey in all major oilseeds cultivating states during both the season i.e. Kharif and Rabi. “Since Gujarat happens to be one of the key producer state of Groundnut and Sesame seed in India during Rabi Season, the Council conducted crop survey in this state,” he said. He further added that the Crop Survey focuses on Groundnut and Sesame seed since they form about 97 per cent of the total oilseeds being exported from India. “There were three teams, two teams for Groundnut and one for Sesame seed, comprising of one person from the trade and three students of Sardarkrushinagar Agricultural University, Banaskantha,” he said. He stressed that the crop surveys are just the assessment of the crop size and not the exact crop figures. He further mentioned that during the crop survey 12 districts were covered for groundnuts and 6 districts were covered for Sesame seed. He said according to crop survey, total Area under cultivation for groundnut is estimated at 187400 Ha, average yield is estimated at 2450 Kg/Hectare and total Production of groundnut is estimated at 4.5 Lakhs Tons. If we compare these figures with last year, area under cultivation is estimated to have increased by approx. 54.83 per cent, average yield by 0.8 per cent and production is estimated to be approx. 56 per cent more compare to last year. For Sesame seed, he said, total area under cultivation is estimated at 54600 Ha, average yield is estimated at 1226 Kg/Hectare and total production is estimated at 52212 Tons. If we compare these figures with last year, area under cultivation is estimated to have increased by approx. 23.09 per cent, average yield is estimated to decrease by 10.84 per cent and production is estimated to be approx. 9.75 per cent more compare to last year.

june 2012, SAARC OILS & FATS TODAY

Cover Story

Exhibitions:

A dependable tool to boost

Oilseeds Export

Indian Oilseed and Produce Export Promotion Council (IOPEPC), under the Ministry of Commerce, is concerned with the promotion of various oilseeds and oils. Formerly known as IOPEA, it was formed in 1956, marking the first organized effort to promote and protect the interests of India’s export trade in commodities like oilseeds, vegetable oils and oilcakes in a collective and concerted manner through a representative body. With subsequent setting up of sectoral associations for different oilcakes and extraction cakes, IOPEPC focused its attention and activities mainly on productivity and export of oilseeds and vegetable oils. IOPEPC is thus the pioneer body for oilseeds and oils in India and, as part of its activities, uses trade exhibitions to their full potential to promote these products. Its current President Rajesh Bheda, in an interview to Media Today Group’s Correspondent Anwar Huda, talks about the importance of these exhibitions to promote exports. Edited Excerpts: Being the President of IOPEPC and responsible for overall trade promotion through exhibitions and delegations, please tell us about the oilseed sector’s growth in the last few years. Exhibitions definitely boost exports. There has been good growth in exports of both sesame seed and groundnut from India which clubbed together constitute about 97 pert cent of the total Indian oilseeds export. The exports of Sesame seed increased by 46.86 per cent in value terms during 2010-11 in comparison to 2008-09 and reached to a level of Rs 2194.43 crore in comparison to Rs 1494.26 crore. The exports of groundnut in value terms increased by 69.47 per cent during 2010-11 in comparison to 2008-09 and reached to a level of Rs 2099.76 crore in comparison to Rs 1239 crore. The exports of sesame seed in value terms during current year (April-Nov, 2011) increased by 23.02 per cent in comparison to same period previous year, reaching a level 10

SAARC OILS & FATS Today, june 2012

of Rs 1663.58 crore in comparison to Rs 1352.26 crore. Similarly the exports of groundnut in value terms during current year (AprilNov 2011) increased by 154.64 per cent in comparison to same period previous year, touching Rs 3000.70 crore in comparison to Rs 1178.39 crore. Thus, there has been high growth in exports of both groundnut and sesame seed from India and it sustained during current year as well. Far East countries like Indonesia, Malaysia, the Philippines, Korea and Vietnam are the major destinations for exports of groundnut and sesame seed How do the exhibitions and events fit in your objectives of export promotion, and in how many exhibitions does IOPEPC participate in India and overseas annually? Exhibitions and events organised internationally and in India are very important from export promotion perspective and IOPEPC participates

Rajesh Bheda

in such events as far as possible. We participated in various exhibitions, trade fairs, conferences and were part of many delegations abroad last year. Generally IOPEPC participates in 3-4 overseas exhibitions annually. The Council, along with exportermembers, participated in Exhibitions and Trade fairs such as Anuga (Paris) and Gulfood (Dubai) during 2011-12. With this, exporter-members get the opportunity to create awareness about their products under the banner of the Council. IOPEPC also participated in a sesame

Cover Story seed conference in China held during September, 2011 and also in International Peanut Forum held in Amsterdam, Netherlands held during 12-13th April,2012. IOPEPC was also part of a delegation to China, organised by the Ministry of Commerce to discuss with the Chinese authorities various measures to boost the exports of oil seeds and oils. What has been the impact on Indian products exports scenario? All these events impact a lot in creating awareness about Indian oilseeds and there has been overall improvement in the export of oilseeds, as I said it earlier. Can you elaborate the positive and negative aspects, if any, of participation in national and international exhibitions? There are only positive aspects. It gives opportunity to showcase our products which India can offer. Exporters get the opportunity to meet and interact with the buyers overseas directly. On quality front, we are lagging behind

our competitors. Can you elaborate the upcoming technological upgradation plans taken by your members? Quality control is an important aspect and council is aware of its responsibilities in improving quality of products. The Council educated exporters, manufacturers and processors, by conducting seminars in different regions of the country. In view of the changing policies of the Government of India pertaining to Exim, IOPEPC is always active in its efforts to keep its stakeholders abreast of the scenario in respect of exports of various oilseeds and oils to different countries, especially in regard to maintaining the quality standards of these produces in keeping with the standards adopted by the importing countries. The Trade Meets and Regional Meetings provide excellent common platforms to the members and other stakeholders to share their views and issues including quality issues. Can you elaborate on the Certification of warehouses and processing units? The Council has been entrusted with

the responsibility of inspecting warehouses and processing units which are engaged in export of peanut and peanut products to various countries. The Council also extends professional advice on conforming to the standards so as to qualify for grant of Certificate. These Certificates not only accord status to the exporter but also provide traceability aimed at ensuring exports of quality oilseeds from India. Iran has become one of the attractive destinations for Indian exporters, and recently a delegation cane from Iran for import purpose. Did you have any meeting with its members to explore the potential in Iran to export our produces? We are aware that Iran is fast becoming an important export destination due to payment in Indian Rupees. We have attended various meetings regarding exports to Iran and also met with the Iran delegation. We are hoping that the export of oilseeds and oils will increase in coming years. n

june 2012, SAARC OILS & FATS TODAY

Dairy per annum for the livestock sector with milk group growing at a rate of 5 percent was set for the 11th Five Year Plan. India’s GDP growth for the last few years has been reasonably good. High growth rates directly increases the prosperity of the middle class who play an important role in bringing demand for food to a higher and more advanced level, creating a market for value-added dairy products.

Indian Dairy Sector

Market efficiency is key to success — R.S. Khanna and Sharad Gupta

ndia is among the world’s largest and fastest growing markets for milk and milk products. The development and growth of dairy sector in India has been fascinating. In a period of four decades, India catapulted from a milk deficit to a milk sufficient nation. During the 1950s and 1960s, 43 percent of milk solids in the total throughput of dairy industry were imported. The commercial import of milk powder touched its peak in 1963-64. This made the policy makers worried and led to the launching of “Operation Flood” programme in 1970 by the National Dairy Development Board and was supported by Technology Mission on Dairy Development in 1989. These programmes resulted in spectacular growth of milk production ¬from 22 million tonnes in 1970-71 to 104.8 million tonnes in 2007-08 and the per capita milk availability more than doubled from 112 grams to 252 grams per day in the same period. India’s milk production today accounts for more than 15 percent of the total world output and 40 percent of Asia’s total production. It continues to grow at about 4 percent per annum far exceeding the global average of 1-2 percent in recent years. The cost of milk production in India 12

SAARC OILS & FATS Today, june 2012

is among the lowest in the world, making it globally price competitive without any subsidy. The global milk output growth remains slow. According to the FAO Food Outlook (Global Market Analysis), world production of milk was estimated to be around 688 million tonnes in 2008, about 1.7 percent higher than the previous year. The production estimate for 2009 was 699 million tonnes, 1.6 percent more than the previous year. This growth is below the global trend rate of 2 percent annually, which prevailed in the previous decade. Milk production is expected to rise by 3.5 percent in Asia to 256 million tonnes. Output in developing countries may reach 337 million tonnes, virtually counting for all the additional global output, as milk production in developed countries is anticipated to remain largely unchanged. Consequently, the share of developing countries in world milk production is expected to rise to over 48 percent, up from a 40 percent share ten years ago and 32 percent at the start of the 1990s. The livestock sector is playing an important role in achieving the targeted agricultural growth in India. This sector has been contributing over 5 percent to the total GDP. A target of 6-7 percent growth

India’s Dairy Market Over half of India’s total milk production is consumed in urban India. The urban population was projected to cross the 400 million mark by 2011. The expected rise in the purchasing power of this growing urban population would boost the dairy market. Presently, some 1,500 out of 5,000 cities and towns in India are served by milk distribution networks. Rising awareness about hygiene standards has prompted the urban consumer to switch to pasteurised packaged milk -a demand of some 140 million litres per day, expected to double in the next five years. The food service institutional market is growing at double the rate of the consumer market. There is increasing consumption of ‘away-from-home’ food. The concept of parlours is opening new vistas for ready¬-to-serve dairy products. There is a growing market for dairy products as ingredients in pharmaceutical and allied industries. As per recent trends, a boom for dairy products is forecast in the defence market. According to the five-yearly expenditure survey conducted by the National Sample Survey Organization (NSSO), the consumption of livestock products, particularly milk, has gained popularity in the last two decades, both in the rural and urban areas. India’s dairy market is multi-layered, shaped like a pyramid with the base made up of the vast market for low-cost, liquid, raw milk. The narrow tip at the top is a small but affluent market, largely for western-type and fresh packaged dairy products. The domestic market for value added products like butter, cheese, ice cream, dairy whiteners and spreads is galloping

Dairy at 8-10 percent per year. The current annual estimated market for western type dairy products is: butter 60,000 tonnes; branded milk powders: 27,000 tonnes; ghee in small packs: 40,000 tonnes; cheese: 13,000 tonnes and infant foods: 125,000 tonnes. The butter and cheese market is growing between 8 percent and 10 percent annually; the infant food market is expected to grow at 10-15 percent. Increased consumption of pasteurised packed liquid milk is likely to retard the growth of branded milk powders. Traditional Milk Products Through millennia, Indian sweet delights have gone through waves of innovations, both in product formulations and processing by unsung masterconfectioners. Traditional methods of ethnic sweet making are now being integrated with modern culinary technology. In the last two decades, scientists at R&D centres in India have used quarg separators and scrapedsurface heat exchangers to pasteurize and process ‘shrikhand’, a fermented dairy dessert. Meatball-portioning machines and industrial fryers make ‘gulab jamuns’, fried balls of milk powder mixed with wheat flour. Japanese pastrymaking machines and planetary mixers make ethnic delicacies. The handbook on “Technology of Indian Milk Products”, published by Dairy India, is a testimony to the significant R&D work done in this field that has resulted in production of indigenous milk products on an industrial scale. India’s first plant to make traditional dairy foods went into production in 1981 in Vadodara, Gujarat, in Western India (Sugam Dairy of the Baroda District Cooperative Milk Producers’ Union Ltd). Since then, a large number of dairy plants have taken to the production of Indian delicacies and specialties. Presently, the annual production of traditional sweets in India is estimated at three million tonnes, valued at Rs 70,000 crore. Branded ethnic dairy products like sweets, paneer, curd, etc, are witnessing rising demand and increased acceptance, especially among urban consumers. The success of the branded curd, flavoured milk variants like

To achieve maximum benefits, the entire dairy sector, both the cooperatives and private entrepreneurs, would need to invest in a rural milk procurement network and reduce its dependence on intermediary milk collectors and transporters ‘Amul Kool’ and traditional sweets like shrikhand, gulab jamun, rasogolla, peda, barfi and several other combinations’ with added fruits, dry fruits, chocolates, etc, from Amul, Mother Dairy, Nestle, Britannia, Bikanervala, Haldiram, Chitale, K.C. Das and the like, are gaining strength in national and international markets. Organised Sector to Grow As per Government of the Economic Survey, about 80 percent of milk produced in the country is handled in the unorganised sector and the remaining 20 percent is shared equally by cooperative and private dairies. Industry sources however maintain that between 22-24 percent of India’s milk output is handled by the organised sector and this is expected to increase significantly in the coming years. However, it is not clear whether the cooperative sector or the private sector will have a larger share. All the planning that goes for increasing productivity, procurement, processing and marketing will have a tremendous bearing on this aspect. Under the Milk and Milk Products Order (MMPO) 1992, the Central and State Registration authorities have registered 865 dairy units with combined milk processing capacity of 88.66 million litres

per day in the government, cooperative and private sectors as on March 31, 2009. MMPO has been subsumed as Milk and Milk Products Regulation under Section 99 of the Food Safety and Standard Act 2006 and it is now being implemented by the Food Safety and Standards Authority of India (FSSAI) which is administered by the Ministry of Health & Family Welfare. Significant changes are expected in the livestock population structure, institutional arrangements and the organisation of livestock production. The declining trend in the population of bullocks and non¬descript cows will gather momentum. Crossbred cows and buffaloes will contribute increasing share of dairy production. The future strategy for growth would have to treat milk as any other crop and dairy farming as an agricultural activity in its own right. Farmers may well be required to consciously grow fodder and invest in the productivity of their animals to bring down the cost of producing milk. But that cannot happen unless they have the incentive to do so, which the currently dominant systems of milk marketing certainly do not provide. Managing volatility in milk markets will be central to the success and viability of any dairy farm over the next 10 years. To achieve maximum benefits, the entire dairy sector, both the cooperatives and private entrepreneurs, would need to invest in a rural milk procurement network and reduce its dependence on intermediary milk collectors and transporters. Private dairies, with rare exceptions, are following a procurement model that leaves milk collection to contractors and local agents. To meet the quality requirements, this situation has ¬to change. Proper institutional mechanism connecting farmers to dairies and further to consumers is needed. Today, more and more private sector companies are setting up infrastructure for direct procurement and closer links with the farmers. Cost inefficiency apart, the outsourcing model is not amenable to proper quality control by the processor. Farmers must receive remunerative prices, which the outsourcing model certainly does not provide, so that will have incentive to

june 2012, SAARC OILS & FATS TODAY

Dairy produce and supply more milk to dairies. Some big names in India, such as Reliance, lTC, OCM, Bharti, Coca-Cola and PepsiCo, are silently working on a big gulp of the country’s milk industry. Yakult-Danone have already made their debut. With the recent acquisition of Cadbury by Kraft, the Indian dairy market can expect some new action. Dairy India 2007 (sixth edition), the most comprehensive and reliable data compendium of the country’s dairy sector since 1983, reckoned the size of India’s dairy sector in 2005 at Rs 227,340 crore (valued at consumer prices). The largest contributor to this is liquid milk (at Rs 82,835 crore), followed by ghee (Rs 22,980 crore), khoa/chhana/paneer (Rs 24,100 crore), milk powder (Rs 4,680 crore), table butter (Rs 770 crore), cheese/edible casein (As 975 crore) and other products such ethnic sweets, ice-cream, etc (As 9,100 crore). Out of the total milk production, 77 percent is sold as liquid milk, with the balance of 23 per cent converted into products. Dairy India foresaw the organised sector growing tremendously and by 2011, it said, the size of the Indian dairy industry could more than double to Rs 520,000 crore. This growth represents an opportunity for multinational food and dairy companies as well as input suppliers to expand their exports, facilitate technology transfer, sign new joint ventures and make profitable investments in India. The challenge would be to focus on: quality, product development and global marketing. The industry would concentrate efforts on human resource development, R&D in milk products, equipment technology and emphasis on exports. Government Policies & Plans The efforts of the Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, Government of India are concentrated on promotion of dairy activities both in Operation Flood and non-¬Operation Flood areas with emphasis on building up cooperative infrastructure, revitalisation of sick dairy cooperative federations and creation of infrastructure in the States for production of good quality milk and milk products. For 14

SAARC OILS & FATS Today, june 2012

The dairy cooperatives in India have thrived not only on their inherent strength but also on the policy support they have rightfully received from the Central and State Governments

pursuing these objectives, the Department is implementing various development schemes -- Intensive Dairy Development Programme (IDDP); Strengthening Infrastructure of Quality & Clean Milk Production; Dairy Venture Capital Fund; Feed & Fodder Development Scheme; and Livestock Health & Disease Control Programmes. In addition, a major programme for genetic improvement, the National Project for Cattle and Buffalo Breeding (NPCBB), was started in October 2000 to be implemented over a period of 10 years in two phases of five years each, by providing 100 percent grant-in-aid to implementing agencies. The NPCBB aimed at genetic upgradation and development of indigenous breeds on priority basis. In all 28 States and one Union Territory were participating in the project. As a result, semen production in the country has increased from 22 million straws (1999-2000) to 46 million straws (200809) and the number of inseminations has increased from 20 million to 44 million during this period. As per the impact analysis report submitted by NABAAD, the overall conception rate has increased

from 20 percent to 35 per cent. The policy for development of dairying is a part of the National ‘Livestock Policy (NLP) that is being finalised by the Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture. The policy aims to encourage dairy and live stock development through small holders, enhance participation of women, improve the productivity of livestock, augment feed and fodder resources, control and eradicate communicable animal diseases, expand capacities of milk handling in the organised dairy sector, improve quality to meet international standards of food safety, conserve animal bio-diversity and protect indigenous breeds of livestock, focus on R&D to improve products and productivity and ensure transmission of improved technology and management practices to the doorstep of farmers. The breeding policy for cattle and buffaloes will focus on improving their performance by encouraging formation of breeders’ associations. One of the activities is conservation of threatened indigenous breeds. The new technologies of Embryo Transfer and Open Nucleus Breeding System, biotechnology and genetic engineering will be applied. The National Livestock Policy also aims at strengthening milk production, procurement and processing facilities by synergising the cooperative and private sectors. The focus would be on shifting to organic farming, product diversification with value addition, product quality and food safety. The government is also exploring to corporatising its facilities through public-private participation and through a mission-mode approach. Emphasis would also be laid on strong legislative back-up to prevent, control and eradicate Foot-and-Mouth Disease and other bacterial, viral and parasitic diseases adversely impacting productivity. Through these policies the government aims at unfolding a series of national plans for increasing milk production and controlling the epidemics. A massive programme to eradicate Foot-and-Mouth Disease (FMD) with an investment of Rs 7,000 crore is also being formulated by the Government of India.

Dairy In another major step, Union Agriculture Minister Sharad Pawar recently flagged off the National Dairy Development Board (NDDB)’s 15year National Dairy Plan which aims at meeting the projected demand of 180-200 million tonnes of milk by 202122. With an estimated outlay of Rs 17,300 crore, the Plan has three major components - enhancing milk production through increased productivity; substantially strengthening/expanding the infrastructure for procurement, processing, marketing and quality assurance through existing institutional structures and by promoting new ones; and, human resource development. The first phase of the project has an outlay of Rs. 2,242 crore. The NDDB is also focusing on increasing the milk production through better genetics. It has entered into collaboration with various institutions to produce a specified number of high genetic merit bulls for the entire country through progeny testing programmes for five breeds - Murrah, Mehsana, pure Holstein Friesian (HF), HF crossbred and Jersey crossbred. As feed accounts for about 70 per cent of milk production cost, NDDB has initiated steps to intensify the dissemination of various technologies that add value to feed and reduce the cost of milk production. The project includes ration balancing advisory services at village level. The NDDB has also set up a Centre for Analysis and Learning in Livestock and Food (CALF) at Anand. It offers a range of reliable and accurate analytical services for food and feed and diagnostic services for genetic disorders and animal health. It also conducts training programmes in food and feed analysis. The dairy cooperatives in India have thrived not only on their inherent strength but also on the policy support they have rightfully received from the Central and State Governments. Market reforms are needed in the cooperative sector. Dr R.P. Aneja, one of India’s most respected dairymen, wrote in Dairy India,: “The backbone of the Indian dairy sector is the cooperatives. These need to be unshackled

Table 1: Estimates of annual milk production and per capita availability, statewise, 2007-08 States/UTs

Milk Production (‘000 tonnes)

Per capita availability (gram/day)

8,925

299

Arunachal Pradesh 50

114

States Andhra Pradesh Assam

752 69

Bihar 5,783

170

Chhattisgarh

866

101

Goa 58

100

Guiarat

7,911 387

Haryana 5,442 632 Himachal Pradesh

874 367

Jammu & Kashmir

1,498 337

Jharkhand

1,442

133

Karnataka

4,244

204

Kerala

2,253

181

Madhya Pradesh 6,572

262

Maharashtra

7,210

186

Manipur Meghalaya

Mizoram

Nagaland

45 57

Orissa

1,625

112

Punjab

9,282

962

Rajasthan

9,536

408

225

Tamil Nadu 5,586

231

Sikkim Tripura Uttar Pradesh

18,861

273

Uttarakhand

1,221 355

West Bengal

4,087

128

Andaman & Nicobar Islands

159

Chandigarh

121

Union Territories (UTs)

Dadra & NaQar Haveli 5 53 Daman & Diu Delhi Lakshadweep Puducherry All India

282

119

104,840

252

Source: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, Government of India, New Delhi. State Departments of Animal Husbandry, Veterinary Services & Dairy Development.

june 2012, SAARC OILS & FATS TODAY

Dairy from the non-business baggage that they carry so as to be competitive and more professional. The non-¬business baggage includes the one-member, one-vote norm irrespective of the business contributed. This needs to be revisited. The restrictions on the primary village cooperatives to sell their milk only to the next tier of the system have tied up the milk producers against the trends of today’s marketoriented economy that expects greater freedom. Market reforms must help the primary milk producers. The form must be dictated by the content which in this case is the value that is brought to the primary milk producers. By implication, the village cooperatives should be able to sell milk to the highest bidder, on a sustainable basis, cutting across the milk-shed lines. This would lead to greater competition and flexibility in the milk-shed concept that is very necessary to maintain the viability of the primary village cooperatives. One of the important achievements of the dairy cooperative movement in India is that even now bulk of the milk cooperatives at the village level are still viable, irrespective of the profitability of the Unions/ Federations. These are the backbone of the milk cooperative structure and this character of the milk movement needs to be nurtured on a mission mode”. What is needed today is a second White Revolution and that too in half the time taken by the first. Keeping this in mind, all stakeholders in the Indian dairy sector should welcome and support the developmental approach proposed by the NDDB through its National Dairy Plan. It is this investment which will lead to increase in per animal productivity and meet the projected requirements of milk in the country as well as enhance the share of milk handled by the organised sector. In the coming years, Indian dairy products will have to compete not only globally but with the imported products in the domestic market as well. (R.S. Khanna is International Dairy Consultant & Director General, Ganesh Scientific Research Foundation, New Delhi, and Sharad Gupta is Editor & Publisher, Dairy India, New Delhi)

SAARC OILS & FATS Today, june 2012

Table 2: Top 12 States in milk production, 2007-08 States/UTs

Milk Production (‘000 tonnes)

Percentage to total milk production (%)

18,861

17.99

Rajasthan

9,536

9.10

Punjab

9,282

8.85

Andhra Pradesh

8,925

8.51

Gujarat

7,911

7.55

Maharashtra

7,210 6.88

Uttar Pradesh

Madhya Pradesh 6,572 6.27 Bihar 5,783 5.52 Tamil Nadu 5,586 5.33 Haryana 5,442 5.19 Karnataka

4,244

West Bengal

4,087 3.90

Total (Top 12 States) ALL INDIA

4.05

93,439

89.13

104,840

100.00

Source: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, Government of India, New Delhi. State Departments of Animal Husbandry, Veterinary Services & Dairy Development. Publishers of Dairy India, New Delhi.

Table 3: Trends in annual milk production and per capita availability, 1950-2009. Year

Production (million tonnes)

Per capita availability (grams/day)

1950-51

17.0

124

1960-61

20.0

124

1973-74

23.2

112

1980-81 31.6

128

1990-91 53.9

176

2000-01

80.6

220

2001-02

84.4

225

2002-03

86.2

230

2003-04

88.1

231

2004-05

92.5

233

2005-06

97.1

241

2006-07

100.9

246

2007-08

104.8

252

2008-09 108.5 (anticipated)

261

june 2012, SAARC OILS & FATS TODAY

GM Technology

Bt cotton

Good, Bad or

Ugly? “In 2002, farmers were told that Bt cotton will reap gold. Aggressive advertising campaigns continued to mislead farmers who quit their indigenous drought resistant varieties and started buying expensive Bt cotton seeds worth Rs 3000 for two packets. It almost doubled the cost of production,” said Vidarbha Jan Andolan Samiti (VJAS) chief Kishor Tiwari

or a farmer there is nothing more precious than his crop. But in parts of Vidarbha region, groups of farmers and women recently burnt their cotton produce. The protesting farmers were all deep in debt and the women were mostly widows of men who, in sheer despair, had committed suicide in recent years. It was not a protest against banks or money lenders. It was a protest against Bt cotton which the farmers blame for their misfortunes. Bt cotton has recently completed a decade in India, and Vidarbha farmers used this 10th anniversary as an occasion to raise their voice against the seed that once promised them gold. But instead, it brought them more misery and turned them into paupers. Losing sheen India commercialised its first transgenic crop, Bt cotton, in March 2002. It was sold to cotton-growing states that were told the seed had an inbuilt capacity to resist the dreaded American bollworm pests. But in the impoverished belts of eastern Maharashtra, Bt technology started losing its sheen in 2005 as crops began to fail. Ramesh Sankeniwa Reri of Hiwara village took a loan of Rs 3.5 lakh for Bt seeds only to see his crop fail last year. “I barely managed to earn Rs 1 lakh from 18

SAARC OILS & FATS Today, june 2012

my failed crop. How will I pay the loan? I have two young children and don’t know how I can sustain my family. Now, I have decided to cultivate soybean and chana. A lot of farmers here have already committed suicide,” he said. The situation is so serious that last year Maharashtra had to bail out Vidarbha farmers with a Rs 2000-crore relief package. “In 2002, farmers were told that Bt cotton will reap gold. Aggressive advertising campaigns continued to mislead farmers who quit their indigenous

drought resistant varieties and started buying expensive Bt cotton seeds worth Rs 3000 for two packets. It almost doubled the cost of production,” said Vidarbha Jan Andolan Samiti (VJAS) chief Kishor Tiwari. One of the main reasons for crop failure in Maharashtra was lack of irrigation facilities. “Vidarbha is a classic example of wrong selection of Bt technology in dry regions. Most farmers who committed suicide in the Vidarbha region are Bt farmers” added Tiwari.

GM Technology But Vidrabha’s tragic tales are only one side of the story. Experts believe it’s wrong to blame Bt cotton for suicides. “There are farmer suicides in West Bengal, too, where there are no genetically modified crops. I think people are wrongly connecting farmer suicides in Maharashtra with Bt cotton,” said S K Datta, director-general (crop sciences) at the Indian Council of Agricultural Research. Datta asserted that the yield is not stagnating everywhere. “Some villages near Rajkot in Gujarat have a productivity of 850 to 900 kg lint per ha. It’s much higher compared to all other states. This is because they have managed the Bt crop well, supplementing it with check dams and drip irrigation.” 10th anniversary There are others, too, who think Bt is good. The biotech industry recently celebrated a decade of success. The International Service for Acquisition of Agri-biotech Applications report claimed that “the production of Bt cotton seed and its by-products had increased from 0.46 million tones in 2002-03 to 1.20 million tones in 2010-11.” Production has indeed gone up in some parts of the country, but the technology has created other problems. According to V S Vijayan, former chairman of Kerala State Biodiversity Board and prominent ecologist, indigenous varieties of cotton have almost disappeared because of cross pollination with Bt cotton. “There was a similar issue in Mexico which is the ‘centre of origin’ of maize. But once Bt maize was introduced, all the local 35 varieties of maize disappeared”. A recent report by the Western Ghats Ecology Expert Panel also declared that no genetically modified crops should be introduced to protect the rich biodiversity of the area. The situation is not very different in Punjab. Some Bt farmers have started taking interest in organic farming. “Initially the yield per acre of Bt cotton went up to 10 quintals but it has now come down to around eight, which is what even an organic farmer is getting without spending anything on pesticide sprays and seeds,” said Kheti Virasat Mission chief Uminder Dutt. On the 10th anniversary of the introduction of this technology in India,

Bt cotton success story is only a hype: SAGE

he Southern Action on Genetic Engineering (SAGE) is of the view that the ‘success story of Bt cotton’ in the last 10 years is only a hype. When Bt cotton spread to 85 per cent of the country’s cotton area in 2009-10, the yield was 474 kg of lint a hectare. “This is just 4 kg more than the yield in 2004-05 when Bt cotton’s share was 5.70 per cent in the total cotton area. Besides 25 lakh acres of new area has been brought under cotton ever since, significantly increasing production,” P.V. Satheesh, National Convenor of SAGE, said. SAGE is an umbrella organisation of non-governmental organisations and intellectuals that oppose genetic engineering in agriculture. He said the cost of inputs went up by 50 per cent for farmers, while the increase in yield was just 4 kg. Quoting Cotton Advisory Board figures, he said yields, in fact, were coming down in the last five years. From 524 kg of lint a ha in 2007-08, yield fell to 474 in 2009-10, a decline of 12 per cent over the previous year’s yield. “Addition of 25 lakh acres and cultivation of cotton under irrigated areas have led to higher production. Praising Bt cotton for this achievement is totally undue,” he said. In Andhra Pradesh, cotton crop on 33.73 lakh acres had failed, while farmers sowed the crop on 47 lakh acres. Besides, Bt cotton also posed a threat to soil health. “We have witnessed soil fatigue in some cotton growing areas,” he said. as Punjab’s farmers return to organic farming, the Bt story seems to have come full circle. Depletion of soil nutrients A new report, which hopes to be a wake-up call for policy makers, points towards drastic depletion of nutrients in the soil due to repeated cultivation of Bt cotton hybrids A new report by the Coalition for GM Free India says ten years after Bt cotton officially entered India, its promoters would like the world to believe that it is an unqualified success but the reality is starkly different. The report put together by the Coalition, a broad network of organizations,

scientists, farmer unions and consumer groups says the hype over Bt cotton is typified by recent advertisements by Mahyco-Monsanto claiming “Bollgard boosts Indian cotton farmers’ income by over Rs.31,500 crore,” which was pulled up by Advertising Standards Council of India for false information. Underlining the deep crisis in cotton farming after a decade of transgenic seeds, the report says that the spate of farmer suicides in 201112 has been particularly severe among Bt cotton farmers. In Andhra Pradesh, out of 47 lakh acres planted with Bt cotton during Kharif 2011 season, the crop failed in 33.73 lakh acres as per the state government estimates in December 2011. This means

june 2012, SAARC OILS & FATS TODAY

GM Technology two-thirds of cotton area had yield loss of more than 50 per cent. In Maharashtra, the poor performance of cotton crop has led to lowering production estimates significantly in spite of an increase in the area of cotton cultivation. Last year’s crisis propelled the Maharashtra government to announce a bailout of Rs 2000 crore, which included paddy and soyabean. Data on area and yield The report puts together various statistics culled from the Central Institute of Cotton Research (CICR) and other sources and says the data should induce the policy makers to give a re-think. While Bt cotton was approved in 2002, the initial adoption was slow, and by 2004-05, only 5.6 per cent of the cotton cultivated area was planted with Bt cotton. Data from Cotton Corporation of India and area under Bt cotton adapted from Dr. K.R. Kranthi, Director of CICR show increasing area under Bt cotton and decreasing yields. Considering the period from 200001 as the pre-Bt Cotton expansion period and the phase from 2005-06 to 2011-12 as the Bt cotton period, a different picture of the yield gains emerges. Yields were already rising sharply in the pre-Bt cotton era due to non-Bt hybrid seed and other factors. In the five-year period from 2000-01, yield increased by 69 per cent. In the Bt cotton period starting from 2005-06, an increase in yield was seen for a couple of years, showing a moderate 17 per cent increase over three years up to 2007-08 (554 kg/ha (hectare) compared to 470 kg/ha). But the yields show a downward trend since then. Presently, the cotton yields have reached pre-Bt levels – 481 kg/ha compared to 470 kg/ha. In fact, the yield estimate of 481 kg/ha for 2011-12 is only an initial estimate from the Cotton Advisory Board and the actual number is likely to be lower, the report says. Stagnant gains This trend is corroborated in Dr Kranthi’s paper reviewing the 10 years of Bt Cotton, quoted in the report. “The main issue that worries stakeholders is the stagnation of productivity at an average of 500 kg lint per ha for the past seven years. The gains have been stagnant and unaffected by the increase in area of Bt cotton from 5.6 per cent in 2004 to 85 per cent in 2010. The yield was 463 kg per hectare when the

SAARC OILS & FATS Today, june 2012

Maharashtra to adopt ‘Brazilian Model’ to boost cotton productivity

he Maharashtra Government is planning to adopt the ‘Brazil pattern’ for boosting cotton yield in the State. “It wants to boost productivity from 475 kg per hectare to 600 kg per hectare,” a senior Maharashtra Government official said. Brazil, in spite of having just 14 lakh hectares of rain-fed land for cotton cultivation, produces about 1,495 kg of cotton per hectare. The global average is 745 kg per hectare. The model is based on high density cultivation practices where, at times, about one lakh shrubs are planted in a one acre area, the official said. A high-level delegation of Government officials have visited Brazil and submitted its recommendations to the Centre. Bt cotton area was 5.6 per cent in 2004 and reached a mere 506 kg per hectare when the area under Bt cotton increased to 9.4 million hectares at 85 per cent of the total 11.1 million hectares.” The same paper provides numbers which show “progressive problems and stagnation of production and productivity.” Maximum yield gains were from Gujarat which brought 0.6 to 0.7 million hectares of new land under cotton (previously under groundnut) irrigated by a 100,000 new check dams (Kranthi. K, 2011). In 2000, 40 per cent of cotton area came under hybrids and the rest was under different varieties. By 2009, 85.5 per cent area came under hybrids and the rest were under cotton varieties. The report says that the use of irrigation facilities, bringing new lands under Bt cotton, low pest activity, well distributed rainfall, the overwhelming shift towards hybrid cotton and introduction of pesticides with novel modes of action are important factors that helped cotton productivity, not just the introduction of the novel Bt gene. According to Dr.Kranthi there has been depletion of nutrients in the soil due to repeated cultivation of Bt cotton hybrids, which draw more nutrients and water from the soil. The crop is exhibiting nutrient deficiency especially in rainfed zones where wilt and leaf-reddening problems are also getting more severe over the years. Despite the farmers’ cry and experts’ busting of the hype and other negative data from the government itself, a rethink by policy makers does not seem to be on the cards. European Concern It is noteworthy that in Europe, an important importer of organic food products from India, there is wide concern

over the spread of Bt cotton in this country. Speaking at BioFach 2012 (Germany), Ulrich Walter of Ulrich Walter GmbH said, “We in Europe, particularly Germany, are worried over the spread of genetically modified organisms (GMOs) in India. Your Government has to deal with that immediately”. Walter’s company is one of the largest importers of organic Darjeeling tea. It is also importing coffee and spices from Kerala, mainly Peeramedu, and holy basil (tulsi) from Uttar Pradesh. “Europeans want to consume products with a clear conscience. Therefore, there is increasing awareness on organic and fairprice products,” said Walter. He said later that genetically modified and conventionally produced crops cannot coexist. “They may be kept at a distance but still there could be pollution of conventional and organic crop through wind and pollen,” he said, adding that people in Germany were particularly concerned over the strides made by India in Bt cotton. Herman Lanting, an agronomist, said that it was increasingly becoming difficult to find non-Bt cotton in India. “India has begun to lose some great traditional varieties such as DCH-32”. According to Ms Simone Seisl of Remei AG, Switzerland, her firm that sources organic cotton for retailing is finding it difficult as farmers were switching over to Bt varieties. “Though some want to get back, it is a big task to get them going again, particularly due to the switch over”. However, Mukesh Gupta of Morarka Organics Foods said that Bt cotton is not posing danger since it was grown in irrigated areas. “Organic products are mainly grown in rain-fed areas and there need not be any fear of GMOs getting mixed,” he said in an interactive session n at BioFach.

View Point

Bt Brinjal…No!No!, Bt Cottonseed Oil…Yes!Yes! Whither policy on GM crops? —Anwar Huda

ottonseed oil is inexpensive and widely used in the food service and snack food industries. It doesn’t require hydrogenation and has a long shelf life because of naturally occurring antioxidants. In developed countries like the U.S., Food and Drug Administration (FDA) regulations require cottonseed oil to be specifically listed as an ingredient if it is present in packaged food, and if has undergone partial or full hydrogenation, as some people are allergic or have sensitivity to cottonseed oil. In India, people are not mostly unaware about this, nor are there any regulations on this aspect. Cottonseed oil is hidden by a phrase “and other vegetable oils” printed on packaged foods. The ingredients of “other oils” are not specified. . In some developed countries, if cottonseed oil is blended with another type of oil, it undergoes the process of hydrogenation and it may be listed as “hydrogenated vegetable oils (soybean, cottonseed and palm oils).” Because of regulations requiring trans-fats to be listed, hydrogenated oils will appear under this listing. Declaring the amounts of mono- and polyunsaturated oils is voluntary.

Although, some experts contend that consumption of highly refined cottonseed oil -- including oil from Bt varieties -- is not harmful, the question arises: when trials on Bt brinjal are kept in abeyance on the ground that it is a food item, why are the authorities silent on the question of consumption of oil from Bt cotton crop? Is it by default that consumption of this oil is

allowed? Or, is it due to lack of awareness on the part of the consumers? Since, nearly 90 per cent of all cotton grown in India is Bt cotton, focusing on this issue warrants urgency. People need to know that some of the refined oils they consume can have cotton seed oil, that too from a GM crop, as one of the components.

Break-up of cotton by-products Item Cotton production (million bales)

2002-03 13.6

2009-10

2010-11

29.5 32.5

Cottonseed production@310kg/bale (million tons)

4.21

9.15

10.07

Retained for sowing & direct consumption (million tons)

0.50

Marketable surplus (million tons) 3.71 Production of washed cottonseed oil (12.5% (million tons) 0.46

8.65 1.08

9.57 1.20

*very few farmers retain cotton seed for sowing over the last nine years, as cotton hybrid seed planting increased to 90% of cotton area. Cotton hybrid seeds production is undertaken separately by specialized cotton growers and marketed by private seed sector in the country. Source: compiled by ISAAA, 2010; COOIT, 2010; AICOSCA, 2010

june 2012, SAARC OILS & FATS TODAY

View Point

Cotton researchers to change track to contain drop in yield The country’s cotton yield is far lower than global average despite its emergence as a major cotton producing nation. The per hectare productivity is as low as 475 kg compared with Brazil’s 2,027 kg, China’s 1,311 kg, the US’ 945 kg, Uzbekistan’s 859 kg and Pakistan’s 684 kg. It started to slide gradually from 566 kg/hec in 2007-08 to 522kg/hec the following year and further to 486 kg/hec in 2009, falling to 475 kg/hec in 2010-11. Voicing concern over declining productivity, the Project Coordinator and Head of the Central Institute for Cotton Research in Coimbatore, Dr A. H. Prakash, said that the institute is in the process of reorienting its research programmes to address the emerging challenges. He said that after the introduction of Bt hybrids in 2002, India’s

contribution to global cotton production increased from 14 per cent to over 20 per cent in 2007. For five consecutive years after 2005, India harvested a record average of 300 lakh bales, beating the till then record of 165 lakh bales before the introduction of Bt.

Many packaged food items carry on their label “and other edible vegetable oils”, sometimes too small to read. Such items include salad dressings, mayonnaise, even crackers, breads, pasta sauces and granola bars. Do these oils include also those extracted from genetically modified crops like Bt cotton? There is no answer. Bt Cotton: A multipurpose crop According to researchers, roughly 67 percent of the cotton produced in this country is used for animal feed, whereas the remaining 33 percent is used as fiber in the textile industry. The main products of cotton plant are cotton lint and cotton seeds. Cotton lint is the fibre of the plant that is used in the textile industry. Cotton seeds yield three important by-products: linters, hulls and kernels. Linters are short fibres that are still attached to seeds after ginning. They are used for manufacturing products such as propellants used for gun ammunition. Hull of the cotton seed is used as animal feed. Oil extracted from the kernel is either used directly or is mixed with other edible oils for human consumption. Cotton is the only oilseed crop that has shown tremendous progress after the introduction of Bt cotton hybrids in 2002. The production of cotton oil registered a three-fold increase from 0.46 million ton in 2002-03 to 1.20 million ton in 2010-11. In

2009-10, cotton oil contributed about 13.7 percent of the total edible oil production in the country.

SAARC OILS & FATS Today, june 2012

Quality Profile The enhancement in yields has been primarily due to several technological changes since 2002, significantly related to the introduction of Bt hybrid, seed treatment and process, the feasible research outcome of the National Agricultural Technology Programme, the Technology Mission on Cotton, integrated pest and nutrient management techniques, and so on. The factors responsible for the decline

Govt policy for Bt cotton and its opposition: Going by replies to questions in Parliament, production of Bt cotton has come to stay in this country, despite protests, including a country-wide agitation on March 26, by those opposed to it. It seems unlikely that the government would review its existing pro-Bt cotton policy, though the Coalition for GM-free India has demanded a comprehensive review of the policy. This year, the 10th anniversary of Bt cotton in India, saw sporadic protests against Bt variety. Protesters were alleging that the crop was responsible for several suicides by farmers who, far from getting the promised high yields, got indebted heavily in that process with no success. This triggered many farm experts and NGOs to raise their voice against Bt cotton with help of their own data and, what they called, ground realities. Not only they, Europe, an important importer of organic foods from India, too is dead against Bt cotton cultivation and is highly worried about the massive spread of this crop in this country. The concern was palpable at BioFach 2012 in

in yield levels included erratic rainfall and emerging biotic and abiotic stress. The quality profile of Indian cotton has also changed. Long staple cotton, which constituted a mere 20 per cent of the total production in 2000, increased to 74 per cent of the total cotton produced in 2010 because of Bt hybrids. The total area under G.barbadense, G.arboreum and G.herbaceum declined to 7 per cent in 2010. In the mid-1990s, the area under such cotton accounted for 6 per cent, 25 per cent and 13 per cent respectively of the total area. “Besides protecting our desi cotton varieties, there is also an urgent need to improve the fibre quality parameters through identification of newer genotypes, developing genotypes for various staple qualities — both extra long staple and Germany. The Southern Action on Genetic Engineering (SAGE) too declared that Bt success story is only a hype. According to it, Bt cotton not only ruined farmers’ lives but soil too. Square-shaped Silence What is surprising is that that the same groups that are opposing Bt cotton are silent on Bt cottonseed oil. Their silence is inexplicable. Impact on health Packaged foods are full of soybean oil, corn oil, cottonseed oil, safflower oil and sunflower oil. These oils are high in omega-6 fats, which compete with healthy omega-3 fats in the body. Omega-3 fats benefit your heart and may also keep you happy. Most nutrition experts say that consumers get too many omega-6 fats in their diets, mostly from processed foods. In fact, it’s quite difficult to find commercial salad dressings, mayonnaise, even crackers, breads, pasta sauces and granola bars that don’t include oils with high levels of omega-6 fats. Nutrition value One tablespoon of cottonseed oil has 120 calories and 13.6 grams of fat, of

View Point short-staple cottons and development of best crop management practices. We, at CICR are at it,” said Dr Prakash. Desi varieties The CICR head also pointed out that cotton farmers in Tamil Nadu are shifting to maize, as it was found to be more remunerative, apart from it being a crop of shorter durcation than cotton. “The area under maize has increased from 95,000 hectares to around 1.02 lakh hectares in the State; but the shift is happening in the area under cotton in and around Coimbatore.’ Asked how CICR plans to enhance productivity, he said: “We are propagating high-density planting using our desi varieties. With high density planting techniques, farmers can improve the yield.” “We are working on different which 3.5 grams are saturated, 2.4 grams are monounsaturated and 7.1 grams are polyunsaturated. It also has 4.8 mg of vitamin E and 3.4 micrograms (mcg) of vitamin K. The oil contains more than 50 percent omega-6 fatty acids and has 70 percent unsaturated and 26 percent saturated fat. Soybean, canola and sunflower oils are lower in saturated fat and omega-6 and higher in unsaturated fat, and therefore are considered healthier. Toxins, Allergies and Sensitivities Cotton is not a food crop, and it is sprayed with pesticides and herbicides to ward off pests, fungus and disease. The seeds naturally contain gossypol, a heart and liver toxin. Most cotton varieties today have been genetically modified to reduce the levels of gossypol in the seeds. The FDA of U SA requires major

transgenic (cotton) plants, pyramiding of genes such as tolerance to drought, inter-specific hybrids, hybrids equal to and even superior to Suvin. These efforts are underway, and at different evaluation levels at the All-India Coordinated Cotton Improvement Project (AICCIP). It may take some time, maybe a year or so,” he said. The CICR is also taking up a project called ‘National Challenge Cotton Programme’. Through this programme, cotton researchers will disseminate to farmers how desi varieties can beat the Bt hybrid in yields. “Both the Government and ICAR have accepted our proposal,” Dr Prakash said. Because of Bt, there is a glut of the long-staple cotton varieties in the market, forcing the mill sector to import short-staple and medium-staple cotton, he said.

High density planting Cotton scientists, who hitherto used to stress on plant spacing, are now propagating high density planting to improve the yield per hectare. “The cotton scenario has changed in the last decade; this has compelled us also to incorporate some change in the cultivation practice, modifying the plant architecture and so on,” said Dr A.H. Prakash, Project Coordinator and Head at the Central Institute for Cotton Research in Coimbatore. He said that the institute had field tested the high density planting strategy at its fields in Coimbatore, Nagpur and Sirsa. “We plan to take up high density planting on a large scale this year, basically in rainfed areas and in Maharashtra. We are looking at 1000odd hectares in that belt,” he said.

food allergens to be listed as such in food ingredients. Milk, egg, fish, crustacean shellfish, tree nuts, wheat, peanuts and soybeans make up this list of allergens. Cottonseed oil isn’t considered an allergen, but it contains proteins with a structure that is similar to those in peanuts. Cottonseed oil allergy or sensitivity can be determined by a doctor or allergist, usually with a skin test.

inform consumers about what foods contain what and what can be harmful to whom. Since Food Safety and Standards Authority of India (FSSAI) is doing noteworthy service to protect the health of the nation, it should now direct all food brands that use cottonseed oil to write it on the nutrition labels accompanied by a warning to those who are allergic to it. At the same time, if any oil is from a GM crop that should also be mentioned clearly on the label of packaged foods as well as that of edible oil packs. . This would help the consumers to take informed decisions. If somebody has an allergy to cottonseed oil or chooses not to include it in his diet, he can avoid these foods by reading the labels carefully. n

Food items having cottonseed oil Cottonseed oil is found primarily in potato chips and fried snacks, peanut butter, boxed cereals, crackers, cookies, packaged breads, salad dressings, mayonnaise, marinades, margarine, artificial fats and artificial butter. Suggestion to Government It is the duty of the authorities to

june 2012, SAARC OILS & FATS TODAY

View Point

There is strong case for revising tariff value for imported vegoils — G. Chandrashekhar India’s $16-billion vegetable oil industry is agog with rumours of an imminent increase in customs duty on imported vegetable oils. For over a year now, industry and trade associations have been flooding the Government with numerous representations to raise the customs duty on imports or to at least revise the tariff value of refined palmolein upwards to reflect market conditions; but policymakers have remained unmoved. Now that palm oil prices at the origin (Malaysia, Indonesia) have declined by over 15 per cent (from $1,200 a tonne to a little above $1,000/t), the demand for a hike in duty has gathered strength. Will the Finance Ministry oblige importers and refiners this time? Given that food inflation is still at elevated levels and New Delhi is still fighting a losing battle against high food prices, a hike in customs duty on imported edible oils appears unthinkable at the moment. Additionally, a weaker rupee is seen neutralising the benefit of fall in overseas edible oil prices in dollar terms. So, a hike in customs duty, for all practical purposes, rules itself out. Revision of tariff On the other hand, without doubt there is a strong case for revising the current tariff value of $484 a tonne on refined palmolein upwards. Looking at the current and emerging market conditions, a tariff value of $1,000 a tonne is justified. With customs duty levied at the rate of 7.5 per cent, the Government will collect $75 a tonne on imported refined palmolein, converted into rupees at the current exchange rate. This is nearly double the existing collection per tonne. With the possibility that the rupee could gain moderately in the coming weeks and at the same time, palm oil market could face further downward pressure, and a hike in tariff value to reflect market conditions may not after all be a bad idea. The move will bring some relief to domestic refineries, but hardly hurt consumers. Most of the refineries depend on imported crude oil for their 24

SAARC OILS & FATS Today, june 2012

raw material requirement. Refined oil arrivals have substantially expanded in the last six months and stood at 9.2 lakh tonnes during November 2011-April 2012, up from 4.9 lakh tonnes during similar period last year. Why should palm oil prices go down further? Contrary to loud assertions by many analysts, palm oil prices have weakened considerably. For instance, Malaysian crude palm oil is currently quoted on the exchange at Malaysian ringgit (MYR) 3,100 a tonne, down from MYR 3,600/t early April. Now, prices are poised to decline further and the next target seems to be MYR 2,700/t. All bearish factors are in operation simultaneously. Palm oil is in peak production season, the US soyabean crop is expected to rebound, crude oil prices have declined, China is holding at least one million tonnes of palm oil, and importantly, the pressure of burgeoning stocks in Malaysia and Indonesia. All these factors in addition to weak seasonal demand have combined to drive speculative capital out of the vegetable oil market. Usually, the market ignores Indonesian stocks. But from anecdotal evidence it is becoming increasingly clear that Indonesia may be building huge palm oil stocks with some estimates going as high as 6.5 million tonnes. Even assuming some overstatement of the estimated stocks, many concede that Indonesian inventory won’t be less than 5.0 million tonnes. Add to this, Malaysia’s 2.0 million tonnes, the world is perhaps awash with palm oil. New Delhi must bear this big picture in mind. Assuming normal weather in the northern hemisphere till harvest time in September/ October, there is enough palm oil to ground. Indonesian palm plantations – at least 2.5 million hectares were planted in 2007-2009 – have entered the peak production cycle and are, therefore, yielding with great vigour.

Feed Technology

O. H. Kruse Feed Technology Center to be ready by mid-2013

new feed mill at Kansas State is becoming a reality. Construction of this technology innovation center has begun and would be completed in mid-2013. The facility will serve as the new home of the feed science and management program, which has provided nearly 700 graduates to the U.S feed manufacturing industry during the 60 years since the industry helped to establish the program at K-State. In addition, several thousand domestic and international feed industry professionals have participated in educational short courses and seminars provided by the program. The faculty members have been a source of problem solving and new technological information throughout the program’s history. The program

has been fortunate to have a dedicated teaching and research feed mill available on campus for student, faculty and client use. Even though remodeled and updated numerous times, the present feed mill has far outlived its useful life and will finally be replaced. “The new feed technology innovation center is one of K-State’s top priorities as we work to become a top 50 public research university by 2025,” said K-State President Kirk Schulz. “We are enthusiastic about the new facilities, which will benefit the industry as well as our students.” The Kruse family of Goshen, California, provided the lead gift of $2 million to honor the company founder, O. H. Kruse, and to stress the importance of educating and preparing the next generation of feed industry professionals. The state of

Kansas, Kansas Bioscience Authority, Kansas State University and its College of Agriculture are providing $10 million in funding required for the new facility. Additional cash and in-kind equipment donations provided the remaining resources needed for construction and equipping of the new facility. “The decision to build a single facility and combine feed-related activities of the departments of grain science and animal sciences was made to gain efficiencies and synergies for the benefit of the teaching, research and outreach programs of both departments and the College of Agriculture,” said Gary Pierzynski, interim dean of the College of Agriculture and interim director of K-State Research and Extension.

june 2012, SAARC OILS & FATS TODAY

Feed Technology

SEA & CLFMA to organize Feed & Feed Ingredients Conclave-2012

he Solvent Extractors’ Association of India (SEA) and CLFMA of India are organizing the 12th National Seminar on ‘Compound Feed viz ‘Feed & Feed Ingredients Conclave – 2012’ on 21 July, in Bangalore. The Theme of the Conclave is ‘Future Outlook for Feed Industry vis-a-vis Demand–Supply of Oilmeals & Price Outlook’. The Conclave is supported by the number of leading Associations and Organisations associated with the Solvent Extractors and Compound Feed Industry in India and expected to be attended by over 250 delegates from all over India and abroad. To help the feed industry to find the economical ways of using alternate oil meals to reduce the production costs and to implement pest control and good sanitary practices during the storage process to avoid loss, the seminar will try to find solutions through cooperation. The topics that will be discussed include demand – Supply of Feed Ingredients, overview of Feed Industry in India, Short Term & Long Term Demand – Supply of Oilmeals/Cereals/ other supplements, Price Analysis and Forecasting - Feed & Feed Ingredients, Product Value Addition to Feed Industry, Quality of Oilmeals, Alternate Feed Ingredients in Feed Formulation, Logistics Issues. The Conclave is expected to provide an excellent opportunity to interact with the members of various segments from the Feed Industry & policy makers from the Government circles including: Oil meal Manufacturers / Marketing experts, Feed Manufacturers, Scientists and Technocrats, Officials of the Union & State Governments, Progressive Farmers, Animal Husbandry, Dairy & Aqua Feed Experts & Consultants, Manufacturers ofAnimal Health Products, Auxiliary Industries viz : Machinery Manufacturers, Brokers / Distributors and other service providers.

SAARC OILS & FATS Today, june 2012

What will ultimately be a nearly $15 million facility will include a modern, automated 5-ton per-hour production and teaching feed mill and a biosafety-level 2 teaching and research feed mill, referred to as the Cargill Feed Safety Research Center. The center will be designed so that scientists will be able to not only safely work with low-virulence pathogens like salmonella in feeds, but also use the facility for other research, teaching and outreach activities. The research center will feature a 1-ton per hour CPM pelleting system equipped with a Wenger High Intensity PreConditioner, Loss-in-Weight feeder system and a Bliss counterflow pellet cooler. “The new feed technology innovation center is another way Kansas State is demonstrating it can support the U.S. Department of Homeland Security’s National Bio and Agro-Defense Facility being built in Manhattan,” Schulz said. In addition to the processing operations, the facility will contain a grain and ingredient receiving, handling and storage facility that will also allow for conducting large-scale grain storage and grain quality preservation research. All hopper-bottom steel bins are being donated by SCAFCO of Spokane, Wash. A separate fundraising effort is currently under way in partnership with the Kansas Grain and Feed Association to complete that part of the facility as a turnkey project. “The facility will be jointly managed and will provide research diets and supplements for all university animal units as well as serve as a teaching platform for all students studying feed science and animal nutrition,” said Ken Odde, head of the department of animal sciences and industry. One of the important operating principles will be that nearly all of the labor will be provided by student employees, and many of those will be able to assume supervisory roles during their college careers. That will be extremely attractive to prospective employers of these graduates.

The preliminary design and cost estimates for the new feed technology innovation center were provided by Younglove Construction, Sioux City, Iowa. McCownGordon Construction, Kansas City, Mo., has been selected as the design-builder and ASI Industrial, Billings, Mont., will slip the tower and install the processing equipment. Other companies on the team include Treanor Architects, Lawrence, Kan.; Orazem & Scalora Engineering, Manhattan, Kan.; Schwab-Eaton, Manhattan, Kan.; and Bob D. Campbell & Co., Kansas City, Mo. A university design team made up of faculty members from both departments and students began working on the concept of a single facility more than two years ago. “The design team worked with engineers and equipment vendors to identify specific machines that would meet our teaching, research and outreach needs,” said Dirk Maier, head of the department of grain science and industry. “We greatly appreciate the generous support and commitment of the many equipment suppliers that are partnering with us on this project.” The feed technology innovation center will house processing equipment that will allow in-depth teaching of operational principles. For example, the center will have a full-sized Bliss Industries hammer mill and a RMS three-pair high roller mill for grinding research, teaching and production. The 5-ton per hour CPM pellet mill in the main tower will be equipped with a Bliss Industries counterflow dryer/ cooler to allow research involving higher levels of moisture for pelleting research. The main mill tower will feature two different batch mixers: a 1-ton Hayes & Stolz Twin Rotor and a 1,000-pound Forberg Twin Shaft paddle mixer that can be used for mixing studies and to provide specialty feeds on demand. Sufficient space has been designed into the facility to allow for future equipment additions. Similarly, a planned feed science and education wing that is to house laboratories, offices, meeting rooms and a state-of-the-art pet

Feed Technology food research center will be part of a second phase of the project. The most important benefit of the new facility will be for students. Imagine the knowledge gained by students who will watch the construction of the new feed technology innovation center on a weekly basis, participate in the commissioning process, have the chance for student employment, and participate in hands-on projects conducted in the new facility. Needless to say, current K-State students are excited by the prospects of the new facility, and it is gratifying to describe to prospective students the opportunities they will have with the new facility. Faculty members are constantly looking for ways to recruit new students into the program and to successfully prepare them for their industry careers. The new facility will improve student recruitment and preparation dramatically. Throughout its existence, the feed science and management program at K-State has provided critical research support to the feed industry. With the new feed facility, research capability will be greatly enhanced. There is no doubt that food/feed safety has become the most critical issue facing feed manufacturers in the immediate future. However, energy efficiency, environmental issues, feed quality and nutritional performance will continue to be critically important to the feed industry and require additional research. Kansas State University is not only making a substantial investment in this new facility, but also hiring new feed science faculty with the expertise to conduct innovative research and transfer new technologies and knowledge to the feed industry. The new O.H. Kruse Feed Technology Innovation Center is designed to accommodate nearly any type of processing research and data acquisition that is needed by an industrial client or university scientist using the new facility. Equipment Suppliers Equipment suppliers partnering with Kansas State University on the new O.H. Kruse Feed Technology Innovation Center are: APEC USA, Bliss Industries, Bunting Magnetics, Cardinal Scale Manufacturing, CMC Industrial Electronics, CPM, EBM Manufacturing, Evonik Industries, Feed Energy Company, Frisbie Construction, Hayes & Stolz, Hutchinson-Mayrath /Global Industries Inc, Intersystems, Integris USA, JEM International/ Express Scale Parts, Kice Industries, Law-Marot-Milpro, RMS Roller Mill Co, Salina Vortex, SCAFCO Grain Systems, Seedburo Equipment Co, Screw Conveyor Company, Superior Boiler Works, Tramco, Venture Measurement, Wenger Manufacturing.

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SAARC Oils & Fats Today E-mail: MediaTodayMails@gamail.com

SEA mulls promoting oil meals export to Bangladesh, Pak

n view of the massive export potential, the Managing Committee of The Solvent Extractors’ Association of India (SEA) has decided to depute a trade delegation to Bangladesh some time during July or August to study the current status of their feed industry and for further export promotion of oil meals into Bangladesh. The Managing Committee at its recent meeting reviewed the export performance of different oil meals to various regions. It was observed that Bangladesh and Pakistan are turning out to be the emerging markets for exports of Indian oilmeals. Oilseeds have been left behind as Pak government has made wheat a priority. In an attempt to ensure food security, Pakistan’s agriculture policy is largely focused on the enhancement of wheat production. Oilseed production typically receives less attention compared to crops like wheat, rice, cotton and sugarcane. The Pakistan Oilseed Development Board was established in 1995 under federal control. But in 2011 its functions were delegated to the provinces. So, at present, there is no central authority to promote domestic oilseeds and to provide a sound regulatory and policy framework to this sector. There is no support price mechanism for oilseeds and the Government of Pakistan does not procure oilseeds. The lack of availability of quality seed, poor coordination among research organizations, lack of suitable machinery for planting, harvesting and threshing operations, improper dissemination of site-specific production technologies and lack of research-based crop management are some of the major constraints being faced by the oilseed sector. Given the poor quality of local oilseeds and logistical hurdles of transporting oilseeds to crushing facilities, the domestic crushing industry has focused more on importing quality oilseeds rather than providing incentives to local growers for increased domestic production. The country is expected to import vegetable oil at a record 2.3 million tonnes for 2012-13 period, 4 per cent up on the previous year. Nearly 73 per cent of Pakistan’s domestic consumption of vegetable oil is met through imports, 8 per cent of which is comprised of palm oil. 2012-13 oilseed production is forecast at a record 5.8 million tonnes, up 8 per cent from the estimated 5.7 million harvested the year before. Imports of oilseeds are forecast at 1 million tonnes (80 per cent rapeseed and 19 per cent sunflower seed). Currently Pakistan imports about 3 lakh tonnes of oilmeals and an equal quantity is being imported annually by Bangladesh from India. There is a good potential for growth as Pakistan has granted India the Most Favoured Nation status for this trade. Also the recent successful bilateral negotiations will push further the exports of oil meals to Pakistan. Bangladesh could emerge as another big market for oilmeals. The only constraint with Bangladesh is non-availability of railway rakes.

june 2012, SAARC OILS & FATS TODAY

Dairy

Indian dairy

constraints & solutions â&#x20AC;&#x201D; Rana Kapoor

ndia may pride itself to be the largest producer of milk globally, but the irony remains in the fact that the Indian dairy industry is relatively inefficient and unproductive with yields for a cow less than one-fifth as compared to other countries. Milk is handled at several levels across the value chain before it reaches the consumer and this multi-layered system not only poses hygiene issues, but each level of handling also increases the end cost. The issue of high cost of domestic production is compounded by the fact that Indian dairy products cannot be exported to overseas markets due to their poor quality resulting out of poor animal health, unhygienic environment and manual handling delays. Addressing the challenges of low productivity of â&#x20AC;&#x2DC;milchâ&#x20AC;&#x2122; animals, poor quality of raw milk and high costs of domestic production for increasing the competitiveness of the Indian dairy industry will require both improvements in technology as well as better management. In order to address these challenges and increase the efficiency and productivity levels of milk, the concept of integrated dairy farms (IDFs) can be implemented across the country. Increase in herd size in each farm, better quality of dairy animals, mechanised milking, breeding with improved bulls and breeds as well as hi-tech production of fodder and feeds are some of the notable changes seen in dairy farming activity. Establishment of IDFs to produce high quality milk and making value-added milk products for competitive markets in metro cities as well as for exports will require integration of all the available technologies for mechanisation and 28

SAARC OILS & FATS Today, june 2012

Rana Kapoor

automation with sound management practices of dairy farming.

operation and maintenance of the farm

Integrated Dairy Farm Model Investors can establish an integrated dairy farm, the salient features of which are as highlighted below: l The investor would invest in constructing the infrastructure for housing, feeding, fodder storage, milking, veterinary care, breeding, milk chilling and storage

l The company can enter into contract farming model with the farmers for procurement of green fodder

The ownership of the farm would lie with the investor and the company would be responsible for the

l The management committee would supervise the milking and keep a record of the amount of milk given by each cow at every milking. After cooling, the milk would be collected by the company and transported through insulated milk tankers for sale to other private dairies or for processing into

Dairy value-added milk products at their own plant. Initially, the milk produced from the own dairy farm can be utilised for manufacture of the processed dairy products including liquid milk variants which can be sold in the domestic markets. As the company would also involve the large scale contract farming for procurement of the fodder for the dairy farm, the farmers can be roped in for procurement of milk from them. This would require the company to provide training, education and technical advisory services to the farmers for improved ‘‘milch’’ cattle productivity, resulting into increased collection to the company and better returns to the farmers for their produce. Increased procurement would lead to varied multi-product mix with export potential as well. Impact The following are the strategic, financial and business impacts of the project: l Strategic – The project will aim at significant reduction of production costs, maximising environmental benefits - a dramatic improvement in product quality. The project would focus on establishing the profitability of the farms and bringing

down the milk production cost through a mix of high herd size, better feeding practices and selective mechanisation and automation in terms of modern design/ process/equipment for cattle rearing, milking, feeding, animal hygiene, manure disposal and effluent treatment plants. l Financial – The investor needs capital investment of around Rs 7 crore towards livestock, construction cost and plant and machinery (depending on extent of mechanisation) for a 500 herd size farm. Such projects have a payback period of five years with a projected IRR of about 19-24 per cent. l Business – The project and presence will give a domestic/export footprint, increased association with farmers for fodder cultivation through contract farming and environmental sustainability through green energy measures. Roadmap Ideally to start off the project, the investor needs to: l Finalise the project site, herd size and processed products mix depending upon the scanning of the region with respect to the agro-climatic conditions, topography, availability of social and physical infrastructure, labour, regulatory environment,

availability of land for adequate fodder cultivation and procurement, availability of water, road/rail connectivity, domestic/export market potential etc. l Prepare the detailed project report and business structure for the finalised herd size, product mix and site. l Undertake the various project approvals and clearances to initiate the project. l Undertake the final implementation on ground in terms of selection of technology partners/suppliers/ contractors for infrastructure development. The vast vegetarian population of India and cultural significance translates into demand for milk that remains inelastic, despite the recent surge in milk prices. Substantial increase in demand for milk over a period of time, with limited increase in production, has contributed significantly to milk inflation. There is thus a need to develop innovative and implementable production models that are futuristic, and have a longterm vision of producing more milk/cow so as to ensure a milk secure country. n (The author is Founder, MD & CEO, YES Bank).

june 2012, SAARC OILS & FATS TODAY

Award

Nichrome wins IPMMI Design Development Award

ichrome, a leading packaging machinery manufacturer and the pioneer in form fill seal machines in India, recently won the Machinery Design, Development and Innovation Award 2012, conferred by IPMMI (Institute of Packaging Machinery Manufacturers of India). Nichrome won this award for the development of high speed oil packing machine – Filpack SMD. It is a double head model with an output of up to 70 packs per minute. The double head construction of the machine saves space and the manpower contributing to the profitability. This machine also offers flexibility of packing different oils and quantities on two different heads simultaneously. “Nichrome could change the benchmark of productivity by doubling 30

SAARC OILS & FATS Today, june 2012

the output with the introduction of SMD oil machine. This has helped the oil companies to handle rising demand with the same manpower and space” Said, Harish Joshi, Managing Director of Nichrome India Ltd. Nichrome has pioneered in packaging for 35 years. It has a world class modern manufacturing set up spread over 10 acres of land at Shirval, about 40 km south of Pune. The infrastructure currently accommodates a manufacturing capacity of 500 machines per year. The set up has more than 150 skilled employees for planning, engineering, supply chain, machine assembly, extensive product trials and testing, commissioning and service. Nichrome follows Lean - Line manufacturing concept wherein dedicated teams are responsible from execution to customer support functions. n

Packaging

Are you using safe food & beverage containers?

s most of the packaged food and drinks are kept in plastic containers, an awareness drive becomes vital to let consumers know what containers are unsafe or safe for them. While the government is still struggling to ban the use of polyethylene bags that are choking the ecological system as they are non-biodegradable, most of the people are unaware of another negative and potentially harmful aspect of plastic-its bottles and utensils. Lack of awareness is the main cause for this harmful ignorance. Just like it is spreading awareness about the dangers of tobacco, it would have been better if the health department has been using tools of media to let people know about the ill effects of not only unsafe kinds of plastic, but also of aluminum and uncoated copper utensils, and using aluminum foil, newspaper and any written pages to keep food items, as all these can initiate health complications. For instance, inc contains lead which is highly harmful. Mercury is also lethal. APEDA has mandatory guidelines for grape exporters to export it minus pesticides but here there is no one to stop people selling pesticides ridden and artificially coloured (they give injections into water melons to make it more red) fruits and vegetables. Even in Delhi, municipal workers burn garbage every morning, though it is banned. The garbage contains plastic, aluminum foil and cigarette packets, among other dangerous things that emit toxic smoke. In developed countries, authorities ban and implement it to protect public health, but here authorities can ban such things but there is none to implement it. Loose edible oil is banned, but go to any middle class locality in Delhi and Mumbai and you can see kirana shops openly selling it. Even if awareness drive is implemented, consumers would be able to know a lot of good things. But even that is rare. PET (Polyethylene Terephthalate) codes are Plastic Recycling Codes. To know what code your bottle or jar has, just see at its bottom side. You will notice a triangle with a single digit number. Match

it with the following facts to know what is best for you and your family. PET 1: It is for one time use only. PET 1 plastic is used to make soft drinks bottles, single-use water bottles and sports drink bottles. Caution: Extended use increases chances of leaching and bacterial growth. Recycle Rate-23 per cent. PET 2: It is safe to use. Also known as HDPE (high density polyethylene), this plastic is used to make grocery bags, detergent bottles, and milk and juice jugs. Recycle Rate-27 per cent. PET 3: Avoid it. Nicknamed as Poison Plastic, it contains many dangerous toxins. PVC or Polyvinyl chloride is used to make garden hose, cable sheathing, window frames, blister packs, blood bags and meat wraps. Recycle Rate-1 per cent. PET 4 : It is safe to use. LDPE (Low density Polyethylene) is used to make heavy duty bags, drycleaning bags, bread bags, squeezable bottles, plastic food wrap. Recycle Rate-1 per cent. PET 5: It is safe to use. PP (Polypropylene) is used to make Medicine bottles, cereal liners, packing tape, straws, and potato chip bags. Recycle Rate-3 per cent. PET 6: Avoid It. PS (Polystyrene) is used to make CD and video cases, plastic cutlery, foam packaging and egg cartons. Caution: It may leach styrene, a possible human Carcinogen, which can be a hormone disruptor. Recycle Rate-1 per cent. PET 7: Avoid it. Dubbed as ‘Other PC’, this plastic is used to make baby bottles, water cooler bottles and car parts. Caution: leaching of Bisphenol A which appears to cause chromosomal damage. Recycle Rate-1 per cent. Useful Tips l Store food and water in glass or stainless steel containers whenever possible. l Minimize or eliminate exposure to plastics with code 1, 3, 6, and 7. l Do not use products (especially Baby Bottles) identified with No. 7.

l Avoid keeping food items in aluminum foil and written pages. Glass is the most eco-friendly packing material: PEI Study The human toxicity potential of glass packaging is the lowest compared with plastic, metal and paper, says the firstever lifecycle assessment study of the Indian glass industry. The study was commissioned by the All India Glass Manufacturers’ Federation, led by companies such as Hindusthan National Glass, Piramal, AGI Glaspac and Vitrium Glass, to assess the environmental impact of glass as a packaging medium. It collected data from 28 furnaces and covered 72 per cent of the domestic glass production. The assessment, carried out by independent global expert PE International and released here on Monday, says that glass packaging has the highest green potential and the lowest global warming risk, compared with plastic, paper and metal, especially when it comes to processed food and beverages. “Glass is the most suitable packaging medium to retain product quality and is least damaging to the environment. Also, it is endlessly recyclable,’ said Juergen Stichling, Global Director, PE International. He said increased use of recycled glass in India from 35 per cent at present to 75 per cent will reduce the industry’s carbon footprint by almost 40 per cent. Mukul Somany, President of the Federation, said the industry was planning to take measures to improve the green profile of glass. These include adoption of technology to reduce glass weight from five per cent to 20 per cent, increase recycling from 35 per cent to 50 per cent, and raise the use of natural gas as fuel instead of furnace oil. The country’s glass packaging industry’s estimated value is over Rs 6,000 crore, with the country among the top 15 markets for glass packaging globally. In India, though, plastic is still the preferred medium for packaging processed food and beverages with 48 per cent share, followed by paper, metal and glass. n

june 2012, SAARC OILS & FATS TODAY

Dairy

Sustainable Dairy Business

Herbal feed supplements to raise productivity — Dr. Prashant N. Patil, M. Sc. Ph. D, Technical Director, RP.P. Bioscience

oth for man and animal, medicinal plants have been in use since ancient times for the treatment of various diseases and disorders. We, therefore, felt that a holistic approach would be appropriate to take care of the health of milch animals and calves.. Our untiring interactions with milk producer¬ farmers, and top officials of pro¬curement and animal husbandry departments and milk unions and private dairies helped to identify prob¬lems in milk productivity, quality of milk, letting down of the milk in milch animals, fertility disorders, rearing of female calves etc. R. P. P Biosciences, therefore, developed following need based herbal compositions (HC): l HC 1 for enhancing milk productivity along with improvement in quality of milk. l HC 2 for inducing heat into cows & buffa¬loes. l HC 3 for solving problems of letting down of the milk in cows and buffaloes. l HC 4 for reducing initial feeding cost of newly born calves. l HC 5 for rumen development of calves. HC 1: The field trials of HC 1 were carried out on descript buffaloes (Murrah, Mehasana, Pandharpuri & Jaffrabadi), nondescript buf¬faloes and cross-breed (HF/ Jersey), indig¬enous cows. Continuous daily 30 g feeding of HC 1 has increased 750ml- 1.25 L of milk per day per animal in descript buffaloes along with rise in fat and SNF by 0.5 - 2.0%. In cross-breed cows, HC 1 fetched rise in milk by 1.5–2.0 L per day per cow along with rise in fat and SNF by 0.2–2.0% per day per cow. HC 1 has also proved its efficacy by rising milk productivity about 300ml–500ml per day in non-descript buffaloes whereas in indig¬enous cows about 500ml - 1000 ml per day rise in milk was observed. There was also rise in fat and SNF content by 0.2-1.0%. The cost benefit ratio of HC 1 was found to be remarkably well as compared to other feed supplements avail¬able in the market. HC 1 has not only enhanced the level of 32

SAARC OILS & FATS Today, june 2012

milk productivity in summer but has also maintained milk yield even in seasonal variations and irrespective of status of lactation. Bombay Veterinary College (B.V.C), Mumbai which is one of the Pioneer veterinary col¬leges in India has certified HC 1 for enhancing milk productivity and for improving quality of milk in buffaloes and cows. The efficacy and cost effectiveness of HC 1 have not only confirmed at ‘Organized’ (B.V.C’s farm) but also at ‘Unorganized’ (Marginal farmers/ landless labors are supplying milk to milk unions through primary co-operative col¬lection center at village level) farms where there is irregular supply of cattle feed con¬centrate, green & dry fodders. HC 1 has also proved its immense importance as a feed ingredient in compounded cattle feed concentrate when HC 1 was incorpo¬rated during the course of manufacturing of cattle feed concentrate. The enhancement in milk productivity along with fat &SNF was found to be comparable with that of topup feeding of HC 1. HC 2: Infertility is one of the major causes for making dairy business non-viable to milk producers. Infertility is attributed to imbalanced nutrition, mineral deficiencies, hormonal Imbalance, faulty management etc. This leads to irregular anoestrus, cystic ovary & early embryonic death. HC 2, therefore, has been developed to bring cows and buffaloes into heat. Daily 20g dose of HC 2 brought cows and buffaloes into heat within 16-21 days from date of feeding of HC 2. BVC has also certified HC 2 for inducing heat into cows and buffaloes. HC 3: Problem of letting down of milk is one of the common disorders observed in milch animals. This problem may be due to post-parturient death of calf, separation of calf from mother after birth, change of place, climatic conditions, milking man, stress due to long travel etc. Since milk producers are not having alterna¬tive safe remedy for solving

problem of letting down of milk in milch animals, still they are using Inj. Oxytocin is still used for solving letting down problem, in spite of knowing its undesirable side effects, Inj. Oxytocin results in the animal to get habituate for injection and also causes hormonal imbalance which poses fertility problems like repeat breeding, threats of abortion and threats of uterine prolapse. Bio-security is another problem, since same needle is being used for the different animals which spread contagious diseases. HC 3, therefore, developed for solving prob¬lem of letting down of milk in milch animals. HC 3 has not only solved the problems of letting down of the milk within 3-5 days from the date of feeding but also enhanced milk productivity by 200-300 ml per day. HC 3 is a better option for Inj. Oxytocin. The cost effectiveness & efficacy of these feed supplements have already been con¬firmed by various milk unions based in Maharashtra, Karnataka and Gujarat. Yet another two herbal cattle feed supple¬ments, viz., HC 4 & HC 5 developed for reducing initial feeding cost & for rumen development of calves respectively. Since these feed supplements contain natu¬ral herbs, till today no adverse side effects have been reported. The patent applications of the five feed supplements have already been filed for Indian and International patents. An International Search Authority has already ac¬cepted patentability of these herbal composi¬tions (feed supplements) and designated ‘Industrial applicability status’ to these herbal compositions. These herbal compositions, viz., HC 1, HC 2, HC 3, HC 4 & HC 5 have been registered in TMR as PhytolactinTM, ComFert@, LOP, @Herbal Milk ReplacerTM & Herbal Calf StarterTM respectively under class 31 of cattle feed supplements. In conclusion, our need-based herbal compositions have not only got accep¬tance at international level but also proved their sustainability at milk pro¬ducers cattle farms.

june 2012, SAARC OILS & FATS TODAY

Oils & Fats News

Agro Tech Foods launches peanut butter

he waiting game is over for Agro Tech Foods. Three years ago, the company in which ConAgra holds a 51 per cent stake, had launched Sundrop peanut butter relying on imports from its US affiliate. Now, Agro Tech is all set to commission its peanut butter facility in Gujarat towards the second half of this fiscal. Healthier Alternative What was attractive about Sundrop was that it is priced at a mere Rs 99 for a 500-gram jar. It did the trick in attracting customers but the more important message it had to spread was that peanut butter was a healthier alternative to both cheese and butter. Asheesh Kumar Sharma, Head of Marketing, points out, “There are not too many vegetarian sources of protein and we wanted to drive home the point that peanut butter was a great option with dietary fibres as the additional benefit.” During this time, the prices of Sundrop peanut butter were hiked, in phases, to Rs 119 and Rs 149. Earlier this month, there was yet another increase to Rs 180 for a 462-gm jar but Mr Sharma believes this is still a competitive price visà-visother imported peanut butter brands. Accepted Brand “We obviously priced it very low in the initial phase to attract customers and the fact that people still buy our brand shows its level of acceptance today,” he said. The company wrapped up 2011-12 with sales of 50,000 jars a month but the overall peanut butter market in India at 300 tonnes annually is still way behind butter and 34 34

cheese at 40,000 and 14,000 plus tonnes apiece. Other brands seen in the Indian market are Funfoods, Skippy and Prutina. Agro Tech’s market feedback showed that Sundrop peanut butter sales in Bangalore, Mumbai and Delhi, where people are more exposed to western brands, were brisker than other parts of the country. Another finding was that older consumers preferred the ‘creamy’ option while youngsters opt for the ‘chunky’ version. Two To Tango Agro Tech also noticed that jam always accompanied peanut butter at the breakfast table. “This prompted us to launch the ‘honey roasted’ alternative. We believe this is where the future lies in India,” Sharma said. The new plant will not only help meet such specific customer requirements in taste but also help Agro Tech offer smaller jar sizes. Going forward, the company will have 100 and 200 gm options at more affordable price points. While ‘honey roast’ is also expected to be the biggest money spinner for the company, it would also explore some spicy options in peanut butter. “This will take some time in coming as we will take one thing at a time,” Sharma said. The company will also continue importing its 462-gm jars for a while even after the Gujarat plant begins operations.

SAARC OILS & FATS Today, May 2012 SAARC OILS & FATS Today, june 2012

IEC Venice meat focuses on eggs & economics

ggs, food processing, economics, the environment – it’s all connected; this was the message as the IEC conference in Venice drew to a close. The final day of the IEC Venice conference focused the industry’s attention on egg processing and economics. The main message was: “Everything is now connected”. The future of food production is now fundamentally connected to multiple external factors including, the environment, the global economy, the global population and very specifically, oil prices. From the stock markets in the US and Europe, through to the world’s changing climate and population growth in Asia and Africa, everything has an impact. Rabobank’s Nan-Dirk Mulder discussed the global economy and the impact this has on the egg industry. Although he explained that the egg industry has been relatively resilient to the global economic downturn, he did stress that the link between the industry and external factors, such as oil prices, has strengthened significantly during recent years. Giampaolo Cavallaro, from Findus/Birdseye; Charlie Arnot, from the Center for Food Integrity and James

Kellaway from Australian Egg Corporation Ltd discussed the importance of creating a long term strategy to produce a trustworthy, sustainable egg supply. In addition delegates heard from Ilaria Capua, of the OIE/ FAO Reference Laboratory for Avian Infuenza and Newcastle Disease; Peter van Horne, IEC’s poultry economist from Wageningen University, and Herman Versteijlen from the European Commission. The afternoon session proved to be a highly topical discussion centred around the responsibilities that the egg industry faces moving forward, and delegates had the opportunity to hear about the latest situation in the European egg market from the European Commission’s Herman Versteijlen. Ilaria Capua discussed the implications of old viruses, but new epidemics, and Peter van Horne presented his latest research into the economics of housing systems for laying hens, looking at cage and noncage systems and comparing production costs and the revenue created. IEC conferences are held twice a year; the next one is being held in London, UK, 9th – 13th September.

Oils & Fats News

Sunflower oil imports increase, canola oil arrives A P poultry industry faces soya price heat first time

unflower oil imports have begun to rise, while the country has brought in canola oil for the first time. According to the Solvent Extractors Association of India, 56,000 tonnes of canola oil have been imported in the last three months. The imports have been made mainly due to lesser local crushing of rapeseed that is quoting higher prices in the domestic market. “Also for the first time, safflower (kardi) oil has been imported in a small quantity,” said the association in a statement. Sunflower was the main constituent of soft oil imports up to April in the current oil year that began in November. It made up 6.07 lakh tonnes of the total 11.29 lakh tonnes soft oil imported during November-April period. This was against 4.12 lakh tonnes sunflower oil imports and 7.85 lakh tonnes soft oils import during the same period a year ago. Price Factor Sunflower is dominating the soft oils basket as it is currently cheaper than soya oil by $25 a tonne. During the same time last year, sunflower oil enjoyed a premium of $105. According to the extractors association, sunflower oil was quoted at $1,295 a tonne against soya oil’s $1,318. During April, edible oil imports were made at a higher price compared with March. RBD palmolein was imported at $1,205 a tonne (1,161), crude palm oil at $1,184 (1,130), crude soya oil at $1,318 (1,274) and crude sunflower oil at $1,295 ($1,240). Imports jump Overall, edible oils import in April almost doubled to 9.25 lakh tonnes against 4.75 lakh

tonnes during the same period a year ago. During NovemberApril, imports are up 30 per cent at 46.03 lakh tonnes (34.82 lakh tonnes). Imports are on the rise in view of a lower oilseeds crop this season to June. According to the Agriculture Ministry, oilseeds production is projected at 30.06 million tonnes against 32.47 million tonnes last year. Palm Complex The palm group of oils, comprising crude palm oil, RBD palmolein, crude olein and crude palm kernel oil, accounted for 75 per cent of the total edible oils import at 34.73 lakh tonnes. The Solvent Extractors Association said that import of RBD palmolein increased by 89 per cent during November-April to 9.19 lakh tonnes (4.87 lakh tonnes). This has led to the share of refined oils increasing to 20 per cent. Crude oils import increased to 36.83 lakh tonnes, though their share dropped to 80 per cent. The share of RBD palmolein is likely to increase this oil year as the current inverted duty structure imposed by Indonesia encourages larger export of refined oils ( 9 per cent export duty) over crude oil (18 per cent export duty). Also, the gap between crude palm oil and RBD palmolein has reduced to just $20 against $60 a year ago.

ggs seem to be no better for the financial health of the poultry industry. A spurt in prices of soya meal has left the industry in dire straits. Currently selling eggs and broilers at prices lesser than the production cost, it is feared that if steps to control prices of soya meal are not taken, the industry could be forced to raise prices by 30-40 per cent. The Andhra Pradesh poultry industry, which accounts for one third of India’s production, feels that an increase in exports of soya meal, especially to Iran, has perked up prices to unprecedented levels. “Soya prices have risen by about 75 per cent. Soya traders are taking undue advantage of support of exports and stocking up large quantities for speculative prices,” D. Sudhakar, president of AP Poultry Federation, said. The State produces seven core eggs per day and three crore broilers every month, providing employment to more than six lakh people. Although there has been a good harvest of soya this season, prices have been ballooning. There has also been

a good harvest of maize up to 22 million tonnes during the last year. “Two years ago, soya was available in the domestic market for Rs 1,400 per quintal. Today it is Rs. 3,200. Due to this, cost of production has increased to Rs. 2.75 for eggs and Rs 70 for broilers. We are still selling eggs for Rs. 2.25,” Sudhakar said. In fact, about 20 days ago soya meal prices were ruling at Rs 18,000 per tonne, going up by 75 per cent to Rs 32,000 today. Industry players feel that a crop failure in countries such as Brazil and US has led to increase in exports from India to countries like Iran, Vietnam, Bangladesh and Pakistan. “We fear soya prices could touch Rs 35,000 in matter of days. Availability also could become an issue,” he pointed out. The industry has called for ban on exports of soya to put the industry back on track. It has also called for provision of damaged wheat and paddy at subsidised rates to poultry farmers to make up for the unavailability of soya at reasonable prices.

SC issues notice to curb milk adulteration

he Supreme Court issued notice to the central and five state governments on a petition seeking complete curb on the sale and supply of synthetic and adulterated milk and its products like ghee, khoya and paneer. An apex court bench headed by Chief Justice S.H. Kapadia issued notice on a petition by Swamy Achuthananda Tirth seeking direction to the centre and state governments to ensure the supply of healthy, hygienic and natural milk and

milk products. Swamy Achuthananda Tirth is the head of Haridwarbased Bhuma Niketan Ashram in Uttarakhand. Besides the central government, the notice has also been issued to the Delhi, Uttar Pradesh, Uttarakhanda, Haryana and Rajasthan governments.The petitioner has sought the framing of comprehensive policy with regards to the production and sale of healthy, hygienic and natural milk to the people.

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Oils & Fats News

Edible oil sector to popularize rice bran oil

Govt removes ban on export of milk powder

he edible oil industry plans to promote the consumption of rice bran oil in a big way to cut down imports. One of the ways to increase its consumption will be by highlighting its various benefits, mainly on health, according to the Solvent Extractors Association of India. Vegetable oils are among the top five commodities on which foreign exchange outgo is the highest. During the last oil year that ended in October, 83.71 lakh tonnes of vegetable oils were imported. This season, 30.02 lakh tonnes have been imported between November and February, against 26.13 lakh tonnes during the same period a year ago. In February alone, imports increased 59 per cent. The value of edible oil imports was estimated at Rs 30,000 crore during 2010-11. LARGEST PRODUCER B.V. Mehta, Executive Director of the Association, said as India is the second largest producer of rice, after China, the country has the potential to produce over 13 lakh tonnes of rice bran oil. Currently, it produces 8.5-9 lakh tonnes. “Of this, 3 lakh tonnes are used as edible oil while the rest is used by the vanaspati industry or blended with sunflower and corn oils and sold as branded products,” he said.

mid surplus availability, the government today lifted ban on export of skimmed milk powder (SMP) to improve finances of dairy firms and help milk producers. The decision to this effect was taken by the Cabinet Committee on Economic Affairs (CCEA). “It has been decided to lift ban on export of SMP,” Agriculture Minister Sharad Pawar said. The government had banned SMP exports in February 2011 to contain rise in domestic milk prices. When asked if there was any quantitative restriction on export, he replied in negative. Pawar said the Commerce Ministry has also been asked to provide incentives to the exports of SMP in line with other farm produce. The ministry has also been asked to examine the possibility of imposing import duty on SMP, he added. The dairy industry has been

India tops in producing rice bran oil in Asia, followed by Japan and Thailand. “We get a lot of export enquiries from West Asia and Australia. But since the Government has banned exports of edible oil, we are unable to tap the huge export potential,” Mehta said. The Centre, in order to rein in inflation and surging edible oil prices, had banned the export of edible oils in bulk a couple of years ago. It, however, allows export of edible oil in consumer packages of up to 5 kg. HEALTH BENEFITS “At least 15 companies make and market rice bran oil in a big way and farmers too are getting good prices for the rice bran. Since there are hassles on the export front, we plan to focus on increasing domestic consumption of this healthy oil,” he said. Towards this end, the SEA held a national seminar on rice bran oil in Mumbai. The seminar, which focused on the oil’s nutritional benefits, was attended by cardiologists, dieticians and nutritionists. Besides the health angle, the price of rice bran oil is cheaper than that of olive oil and is comparatively less than that of groundnut oil, Mehta said. Currently, groundnut oil is ruling at Rs 1,25,000 a tonne, while rice bran oil is quoting at Rs 69,500 a tonne.

Ruchi Soya in world’s top 250 FMCG companies

ountry’s largest manufacturer of edible oil, Ruchi Soya has found a place in top 250 consumer products companies of the world. It has been ranked at 175 in the top 250 consumer products companies, in the “Global Powers of the Consumer Products Industry 2012”, 36 36

according to report published by Deloitte Touche Tohmatsu (Deloitte). Only three Indian consumer products companies - Ruchi Soya, ITC Ltd and Videocon Industries Ltd have featured in the list. of top 250 consumer products companies from across the world.

SAARC OILS & FATS Today, May 2012 SAARC OILS & FATS Today, june 2012

facing liquidity crunch as it could not make profit through sale of skimmed milk powder due to steep fall in domestic prices following surplus supplies. Domestic prices of SMP have declined to Rs 150 per kg now as against Rs 190200 per kg in the same period last year. Mother Dairy Managing Director S Nagarajan said, “The exchange rate is favourable for export but we need to ascertain actual demand in the international market.” Sterling Agro Industries Managing Director Kuldeep Saluja said, “The move will benefit both industry and farmers. There is excess stock of over one lakh tonnes lying with industry. The export will help improve liquidity.” Milk production in India, the world’s biggest producer, is estimated at over 120 million tonnes in 2011.

JSM Corp to launch Pinkberry yogurt in India

SM Corp, which is bringing American frozen yogurt brand Pinkberry to India later this year, is banking on experiential elements to give it an edge over the competition here. The competition includes Cocoberry, Kiwi Kiss, Red Mango and Amul. Jay Singh, Co-Founder, JSM Corp, claims not just the taste, but designer interiors and its being fullservice will distinguish it from the others. A premium product, it will be housed in malls and the high street, but “it’s certainly not a food court brand”, he said. The first outlet is likely to be launched in Mumbai before

the year-end. Singh would not reveal further business plans. Outlet size will range from 400-1,500 sq. ft. JSM Corp has brought other brands such as Hard Rock Café, California Pizza Kitchen, Trader Vic’s and Mai Tai to India. For Pinkberry, founded in 2005 in West Hollywood, India is the 18th country it’s entering. It has over 175 stores worldwide. In the US, it had earlier been criticised for various claims about health benefits. One of them was that the product as it was made then did not qualify to be called frozen yogurt in terms of bacterial culture count per ounce.

june 2012, SAARC OILS & FATS TODAY

Oils&& Fats Fats News News Oils

Rising cost feed put High palm oil of prices may poultry industry in red affect demand spot

n increase in production coupled with a good rally in the prices of poultry feed products has left the poultry industry in severe crisis. The cost of production is rising continuously but an overflowing stock is keeping the market under pressure, said Vinod Kumar, proprietor of Bubbly Breeding Farm. “Due to surplus stock, currently we are selling eggs and broilers at prices below the production cost. They are perishable products and we can not preserve them for a longer time period,” he added. Domestic and export demand are good but the easy availability of stock is not allowing any improvement in market, said Kumar. The number of hatcheries in this region has also increased leading to higher production. Prices may increase in near future as production goes down in summer, he added. After touching a record high earlier this week, soya witnessed some correction. 38 38

Soya prices eased by Rs 100 and settled at Rs 3,400 a quintal. Other ingredients of poultry feed are under pressure. Arrivals from Bihar have pulled maize prices further down by Rs 50 to Rs 1,350-1400 a quintal. Bajra remained unchanged at Rs 1,150 a quintal. Fish oil was quoted at Rs 68 a litre while DCP was at Rs 3738 a kg, Rs 3 up from previous level. Prices of poultry feed products remained unchanged. It is unlikely to see any major alteration in the prices of poultry feed products in the near future, said Satpal Singh, Proprietor of Sarvottam Poultry Feed Supply Centre Pvt. Ltd. Broiler concentrates feed was quoted at Rs 1,600 for a 50-kg bag, Broiler Starter Mash was at Rs 1,280 for a 50-kg bag while, Broiler finisher was at Rs 1,260 for a 50-kg bag. Broiler Pre-Starter Concentrate 30 per cent was at Rs 1,400 for a 30-kg bag, while layer concentrate was quoted at Rs 1,210 for a 50kg bag.

SAARC OILS & FATS Today, May 2012 SAARC OILS & FATS Today, May june2012 2012

South India VAT War: Losers & Gainers

dible oil traders in South India are exploiting the large differences in State taxes to evade the high tax rates in Tamil Nadu. As a result, organised trade in Tamil Nadu and the State Government are losing out to neighbouring States, according to large players in the business. The State Government has to adjust its rates with that prevailing in neighbouring States to plug the loop hole and increase revenue from the edible oil trade. A large dealer and importer pointed out that Tamil Nadu levies 5 per cent Value Added Tax on edible oils. Kerala has been levying 1 per cent VAT from April 2012, down from 4 per cent, Puducherry 3 per cent and Andhra Pradesh effectively levies 2.5 per cent VAT. It offers a 50 per cent rebate on the prevailing 5 per cent VAT linked to investments in edible oil refining units. A trader bringing edible oil into Krishnapatnam Port in Andhra Pradesh, about 140 km North of Chennai, can bill the commodity for sale in Puducherry and pay the lower tax but sell the goods

in Chennai. The trader saves 2 per cent on tax on a commodity priced around Rs 65,000 a tonne for palmolein or about Rs 75,000 in the case of sunflower oil. Similarly, traders on the western parts of Tamil Nadu can save slightly more with billing in Kerala, where an equal quantum of Central Sales Tax can be paid. Considering that the size of the edible oil market in Tamil Nadu is about 80,000 tonnes a month, there is a major loss of revenue that can be corrected said traders and importers. The traders have represented the case to the State Government, they said. Forex Woes The trade has also be hard hit by the rapid loss of value of the rupee against the dollar. Traders typically hedge only a portion of their commitment, and in the last one month have been caught completely off guard by the Rs 3-drop, an importer said. Between May 1 and May 31, the value of the rupee against the dollar slid from Rs 52.97 to Rs 56.09, a loss of Rs 3.12.

Mother Dairy enters Jaipur

other Dairy, the iconic milk brand of Delhi, has now launched its entire range of dairy products including yogurt, mishti doi, butter milk, Butter and cheese in Jaipur. “Having catered to the Delhi market for over three decades, we are now on an expansion mode and wish to make Mother Dairy a pan-India brand,” Mother Dairy business head for dairy products

Subhashis Basu said. This expansion to Rajasthan is a strategic step and the cooperative is positive that people here will enjoy the goodness of our dairy products, he added. Mother Dairy products will be present in Jaipur through various forms of retail outlets, multi brand and modern retail, he said.

Oils & Fats News Corrigendum May 2012 issue of SAARC Oils & Fats Today carried in its Cover Story a published news item under the title “Dudhiyas Stand between Mother Dairy and Farmers.” Mother Dairy has issued a rebuttal, describing some of the portions in the impugned article as “misleading” and “factually incorrect.” We are therefore carrying here the version of Mother Dairy Fruit and Vegetable Pvt Ltd. —Editor

Mother Dairy protects interests of both farmers & consumers

t the outset, we would like to state/mention that we were taken aback by the misrepresentation of facts in the said article, where our Organisation/ Company has been portrayed as working against the interests of the farmers. We would like to inform you that the aims, objects and endeavour of our organisation are to facilitate adequate price to the farmers for their produce, and at the same time to provide the milk to the consumers at fair price. Our reply, in respect of the factually incorrect portions in the said article, is as under: 1. Para 2 of the article mentions “Its monthly earnings are anywhere between Rs 72 crore and Rs 11 7 crore, more than those of rival Gujarat Cooperative Milk Marketing Federation (GCMMF), which makes and markets the Amul range of products” The allegation in respect of monthly earnings is misleading and also factually incorrect. The business of procuring and processing of Milk is characterized by two cycles: the lean and flush cycles. During the lean season/ cycle, the yield goes down and the procurement prices increase. There has been a sharp rise in the procurement prices in 2011. This compelled a price increase during the lean season last year. However, in order to ensure that the consumer doesn’t feel the steep rise, only a calculated price revision was done. This was in anticipation of a good flush season/ cycle when

the procurement prices would again come down. The MRP revision done was therefore not fully compensating the increase in procurement price. Our Company always strives to maintain a balance between the consumer and the dairy farmers. Therefore, a balancing act between the flush and lean seasons needs to be and is practised to run the operations efficiently. As such, Milk financials should be seen with an annual perspective rather than monthly and the Company during the financial year 201011 made loss in milk business. Notwithstanding the above, the Company’s MRP in Full Cream Milk is cheaper than GCMMF price by Re 1. Further, as far as we are concerned, 75-80% of every consumer rupee goes back to the farmer. Statements like our monthly earning are between Rs 72 crore -117 crore and “Dudhiyas Stand between Mother Dairy and Farmers” are thus not only misleading, but is also incorrect and false. 2. Para 4 of the article mentions “Unfortunately, this has been at the expense of small farmers in North India who now get Rs 17 for every litre of milk they sell to Mother Dairy compared with Rs 30 earlier”. We are (for the month of March and April, 12) paying Rs 24.50 - Rs 27 for every litre of milk to the dairy farmers. As such, the statement that price of Rs 17 for every litre of milk is being given to the farmers by our Organisation is untrue.

Price volatility affects cotton, Oilseeds & guar to get benefit

he acreage under cotton may take a dip this year after having touched a record high last year. Hit by the volatility in prices induced by the flip-flop in export policy, cotton growers are likely to switch over to other lucrative crops such as oilseeds – soyabean and groundnut – and guar among others. Trade and industry sources expect cotton area to come down by 10 per cent to 20 per cent in 2012-13. Cotton area had touched a record high of 121.91 lakh hectares in 201112 season that ends June 30, a growth of 40 per cent in the past seven years. “We expect area to come down by 10 per cent and it is considered normal as area under cotton had seen an abnormal rise in past few years. An additional 10 per cent decline is possible if other crops such as guar prove to be lucrative,” said M.B. Lal, Managing Director of Mumbaibased Shail Exports Pvt Ltd. He estimates the overall area reduction to be around 15-20 per cent over last year. Better Returns Farmers have already begun the switchover in parts of Punjab and Haryana to guarseed, prices of which range around Rs 28,000 a quintal. “Assuming the price of guar drops even further by a huge margin and the prices of cotton doubles, it still makes sense to cultivate guar, because the cost of cultivation of guar is much less” said Ajay Vir Jakhar, Chairman of Bharat Krishak Samaj. Jakhar, himself, is switching over to guarseed from cotton this year.

“The switchover is all driven by sentiments ahead of planting season and farmers typically look at crops that have given better returns last year,” said Dr Gyanendra Shukla, Director, Mahyco Monsanto Biotech Ltd. He estimates the cotton area to come down by 5 to 10 per cent. In States such as Gujarat and Maharashtra, cotton growers may prefer to opt for either groundnut or soyabean as realisations were high last year. “We expect a five to seven per cent increase in area under soyabean on a conservative basis and most of this will be in cotton growing areas of Maharashtra and Andhra Pradesh,” said Mr Rajesh Agarwal, spokesperson for the Soyabean Processors Association of India. The switchover will also happen in Karnataka, Rajasthan and Tamil Nadu that are consuming centres, he said. Soyabean acreage last year stood at around 100 lakh hectares. Cotton prices had crashed to levels of Rs 3,000 a quintal in the aftermath of the ban imposed on exports. Since then, they have recovered marginally to be in the range of Rs 3,1003,200. B.V. Mehta, Executive Director of Solvent Extractors Association of India, said that farmers in Gujarat will look at groundnut, jeera or guar. “It all depends on area to area and local climatic condition at the time of planting,” Mehta said estimating overall oilseed area to up by three to five per cent this year.

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SAARC OILS & FATS Today, june 2012

june 2012, SAARC OILS & FATS TODAY

Date of Publishing 4-5 Every Month Date of Posting 9-10 Every Month

Postal Regn. No. DL (S) - 17/3193/2012-14 R.N.I. Regn. No. 69781/98