India’s milk production could double in next 25 years, price increase cuts the number of purchases

INDIA – India’s share in global production is estimated to nearly double to 45 percent in the next 25 years from 23 percent while the demand for milk is projected to rise to 517 million tonnes, leaving an export surplus of 111 million tonnes.

According to National Dairy Development Board’s (NDDB) Chairman Meenesh Shah, the Indian dairy market is estimated to jump over two-fold to Rs 30 lakh crore by 2027, driven by growth in both volume and value terms.

The growth would also come from an increase in the production of milk and other dairy products as well as value appreciation, he added.

The country’s milk production was 210 million tonnes in 2021, Amul Managing Director R S Sodhi and also the MD of Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets dairy products under the Amul brand, said.

He added that the per capita availability of milk in India will increase to 852 grams per day in the next 25 years from 428 grams per day in 2021.

Sodhi highlighted that India’s dairy sector has the most efficient supply chain in the world, the packaging and transportation costs for supplying milk to consumers are very less compared to the global average.

To continue to champion the dairy space, Chairman Meenesh Shah stated the Indian government is not “insensitive” and will protect the interest of 8 crore dairy farmers while signing free trade agreements (FTAs) with other countries.

Commenting on the impact on the dairy sector from proposed FTAs with many countries including the UK, Shah said the government will not take any decision that will be detrimental to Indian dairy farmers, since about 8 crore farmers derive income from the dairy sector.

Rising milk prices force households to downgrade quality, reduce consumption

Meanwhile, rising prices of one of the most common food staples in Indian households, milk, and milk products, has forced many people to either reduce the quantity of their purchase or switch to a cheaper alternative, a survey by LocalCircles showed.

Milk, butter, ghee, and buttermilk are among the most consumed food items in not only the largest producer but also the largest consumer of milk and milk products, according to the United States Department of Agriculture (USDA) Dairy and Products Annual 2021 report.

Leading milk suppliers Amul and Mother Dairy hiked milk prices by Rs 2 (US$0.025) per liter with effect from August on account of rising input costs.

 This is the second hike by Amul and Mother Dairy in nearly six months after they both had an increase of Rs 2 per liter at the beginning of March.

According to GCMMF, the major reason behind the rise in prices of milk is due to the steep increase in costs of energy, packaging, logistics, and cattle feed that has led to an increase in the overall cost of operation and milk production.

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