India says it will stockpile thousands of tonnes of dairy products it has bought from Fonterra until next dairy season.
The country's National Dairy Development Board signed contracts to import milk powder and industrial butter oil but is now facing political flak for buying the imports amid a developing domesticglut.
The board will now only hold the controversial dairy imports "as buffer stock" to be "carried over [to] the next lean season", the Hindu newspaper reported.
Fonterra has clamped down on information about a shipment due to arrive in India on Wednesday, because Indian activists have threatened a terrorist-style attack when it docks at Mumbai.
The New Zealand dairy company said India had a poor monsoon last year, meaning local dairy production was down and not enough to match domestic consumption.
"At the request of the Indian Government, Fonterra entered into commercial negotiations with the National Dairy Development Board, an agency of the Indian Government, on supply of milk powder and anhydrous milk fat," the company said.
Farmers have demanded the Government scrap the imports but the dairy development board will now supply the imported goods to state dairy federations "only if they are not in a position to maintain supplies to consumers by using locally available fresh milk or surplus milk powder", according to a Union Agriculture Ministry statement.
