22 July 2021 Nuflower Foods Engagement Dairy

Engagement Dairy Nuflower Foods 22-07-2021

Had a Detailed discussion with Vishwas Ji of Nuflower on SMP Fundamentals and Outlook . Also had a pricing strategy discussion on SMP procurement:

  1. SMP Outlook in the coming 1-2 months is looking stable to positive as Gujarat government has announced export subsidy of INR 50 per kg on SMP which will lead to increase in demand in the coming months.
  2. Monsoon is delayed which has impacted the calving cycle in Northern region. Milk arrivals are lower in Northern region which has not SMP prices to fall further towards INR 170-180 levels during this on-going period of demand destruction caused by Covid 19 second wave. SMP prices in South and Western region has stabilised around INR 200-210 levels from the last 2 months.
  3. Currently, demand of SMP is less as traders are not stocking up SMP due to fears of covid third wave. It is right time to book SMP as prices are stabilized and subdued and there is high probability that prices may remain on a higher side in the coming 1-2 months.
    We recommend you to book SMP at INR 195 to 200 per kg for August and September requirement.