The Indian Ice-cream Manufacturers association (IICMA) in a note said that the price of ice-cream is likely to see a sharp surge due to an increase in the cost of import of Skimmed Milk Powder coupled with low milk supply (due to low availability of fodder owing to irregular monsoons).
SMP is a key raw material in frozen desserts and ice-creams. Its prices have more than doubled year-on-year from Rs 150/kg to Rs 330-360/kg. Its availability has also been affected by India's decision to opt-out of the Regional Comprehensive Economic Partnerships (RCEP)- a proposed free trade agreement between countries in the Asia Pacific region.
Further, milk supply in the country has fallen by 10 to 15 percent, prompting brands like Amul, Vadilal and Mother Dairy to already increase the rates of their ice-creams by 5-10 percent per unit in January.
In its note, the IICMA has proposed the creation of a buffer stock of 65,000 MT through imports to stabilise the domestic market and thereby maintain/reduce prices within acceptable levels to protect the interests of farmers and consumers.
However, Amul's MD Sodhi told Times of India that the shortage in milk supply was temporary and there was no need to import. He said that the flush season (when an increase in milk supply commences) has already started in December and is likely to continue till April. He further added that imports will hurt the interests of farmers and hence cannot be encouraged.