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Gujarat government to provide a subsidy of Rs 300 crores to help Amul to continue with its export of milk powder

Gujarat government has announced its decision to give export subsidy of up to Rs 300 crore to the Gujarat Cooperative Milk Marketing Federation Limited (GCMMF) to sell its milk powder in the international market. The Gujarat Cooperative Milk Marketing Federation Limited (GCMMF) markets the brand Amul.

While making the announcement, the state’s deputy chief minister Nitin Patel said that with a cut in the price of milk powder in the international market, the export of GCMMF’s milk powder had decreased and the cooperative had sought the government’s help. “The prices of milk powder in international markets have gone down significantly. As a result, the export of milk powder in international market has decreased.

According to Patel, due to the decrease in export of milk powder, around 1.10 lakh metric ton of milk powder, worth Rs 2,500 crore, is lying with the GCMMF. GCMMF’s annual turnover is Rs 40,000 crore. He said that to sell the milk powder in the international market, the prices need to be lowered. In that scenario, the milk federation will face losses. The government has, thus, decided to give GCMMF a subsidy of Rs 50 per kg for the export of milk powder for six months starting July 1. An upper limit of Rs 300 crore has been put on the subsidy.

According to a spokesman of GCMMF, while the rate of milk powder in international market is Rs 135 per kg, the production cost of milk powder for GCMMF is Rs 230 per kg. With the subsidy, the state will share the loss in clearing a stock of around 60,000 metric ton milk powder, Patel said. “Rest of the loss will be borne by GCMMF,” Patel added.

 

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