NEW DELHI: The government has decided to ban the export of skimmed milk powder till September in response to rising milk prices. The decision, made on Thursday, could help ease domestic prices of both milk and milk products. But some industry officials said the move could erode farmers’ earnings and India’s export credibility.

The ban comes days after a couple of dairies raised retail prices by up to Rs2 a litre and half-a-dozen others declared plans for similar increases, as farmers began charging them more.

Milk prices have shot up twice over the past 12 months. Last month, all major dairies in the country increased milk prices by about Re1 per litre, the revision representing a rise of 17 per cent over six months. A further increase by 25 per cent is likely by the time summer sets in.

The trend was evident since January 2006 and it was well recognised that the increased exports of milk power, skimmed as well as whole, had been causing the price rise.

With inputs from Reuters