Punjab-based milk products supplier Milkfed witnessed a sharp decline in exports of its ?Verka? brand desi ghee in 2009-10. Officials said ample demand in the domestic market and the economic recession hindered exports.

Even in the domestic market, Milkfed was able to meet only 95% demand for desi ghee. The total demand stood at around 5,000 tonne.

?There was not enough fresh supply of milk or stored stocks of butter to make desi ghee in order to meet the shortfall of 5%. It is due to this reason that Milkfed could not meet 40% of the demand for Verka ghee in the exports market,? officials said

In 2009-10, Milkfed?s exports were valued at around Rs 12.5 crore compared with Rs 16 crore in the previous financial year.

Milkfed has been supplying desi ghee in countries like the United Arab Emirates (UAE), Saudi Arabia, Oman, Australia, New Zealand, the Philippines, South Korea and Malaysia.

?It was essential for us to first meet the domestic demand; otherwise private players would move in and capture our market. Verka ghee is quite popular in Punjab and neighbouring states like Haryana, Delhi, Himachal Pradesh, and Jammu & Kashmir. Moreover, due to appreciation of Indian rupee against the dollar, exports were hit,? Milkfed managing director VK Singh told FE.

Singh said demand for Verka brand desi ghee in the countries of the West Asia is high. This has led the cooperative strengthen its base here. ?This year, we are going to do better on this front. We have set a target of exporting desi ghee worth Rs 20 crore in 2010-11. The cooperative is working towards increasing production of desi ghee to meet the growing demand. Our stocks of fresh milk will be augmented by the decision of the National Dairy Development Board to import butter oil on zero duty from New Zealand,? Singh said, adding that the cooperative would use butter oil, skimmed milk powder and water to reconstitute fresh liquid milk, which is the standard international practice.

?This will help us in the summer months when milk supply drops. Hence, we will be able to use out butter stocks to make desi ghee. The milk constituted with the help of butter oil will be 30% per 1,000 litre of milk,? Singh said.