Nepal's DDC begins ghee exports amid concerns over domestic supply

The Dairy Development Corporation (DDC) of Nepal has initiated a significant push into the international market with its first export of ghee, shipping a 500-kilogram consignment to Dubai last Friday. This move is presented as a crucial step in establishing a Nepali dairy brand globally. The state-owned corporation has ambitious plans to extend its ghee exports to Japan, South Korea, and Tibet, having secured agreements to export 50,000 kilograms, or 50 tonnes, of ghee annually.

During a parliamentary meeting on August 18, the Minister of Agriculture, Forest, and Environment, Geeta Chaudhary, reported a 35 percent increase in DDC product sales and confirmed preparations for ghee exports to China. DDC General Manager Dr. Sharan Pandey stated that an agreement with private company Rato Ra Chandra Surya International Pvt Ltd is in place for the annual export of 50 tonnes, with exports to Japan, South Korea, and Tibet anticipated to commence in November.

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We have started by sending 500 kilograms of ghee to Dubai. An agreement has been reached to export 50,000 kilograms annually.

Despite the export enthusiasm, the DDC faces challenges in balancing international sales with domestic supply. The corporation is reportedly under pressure to meet local demand as its existing stocks are diminishing. This export initiative coincides with Nepal's lean milk season, which runs from March to September, when milk production naturally decreases. Traditionally, DDC utilizes the surplus milk collected during the preceding flush season (October to February) to produce and store butter and milk powder for use during the lean period.

Information Officer Nilkantha Gautam characterized the Dubai shipment as a market test rather than a major expansion, emphasizing that domestic demand is already high, with current stocks projected to be depleted by October. Figures from Minister Chaudhary indicate that as of August 17, DDC held approximately 150 tonnes of milk powder and 130 tonnes of butter. However, considering that butter contains about 20 percent moisture and yields only around 80 percent pure ghee after clarification, the actual ghee production capacity from these stocks is limited, raising questions about the sustainability of the export drive amid domestic needs.

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The 500 kilograms we have sent is only a test in the international market. Demand for our ghee is already so high in the domestic market that our existing stock is expected to reach zero by October.