Indian Dairy Industry Struggles to Meet Demand: Imports Likely to Increase

On Wednesday, a senior government official stated that if necessary, India might consider importing dairy products such as ghee and butter, as there is a shortage of such items due to stagnant milk production during the previous fiscal year.

The official noted that the government would evaluate the milk stock in the Southern states, where the flushing season has commenced, and subsequently take action to import dairy products. He also mentioned that the country’s milk production remained unchanged in 2022-23 due to the spread of lumpy skin disease in cattle.

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Official data released by news agency PTI reveals that India’s milk production was 221 million tonnes in 2021-22, compared to 208 million tonnes in the previous year.

During a press briefing, Rajesh Kumar Singh, the Secretary of Animal Husbandry and Dairy, stated that the domestic demand had increased by 8-10% during the same period due to the resurgence in post-pandemic demand.

The official clarified that there is no shortage of milk supply in the country; however, stocks of dairy products, specifically fats such as butter and ghee, are lower than the previous year. He further added that an adequate inventory of skimmed milk powder (SMP) is available.

Singh noted that importing dairy products might not be advantageous presently since global prices have been high in recent months. He added that the government would evaluate the flush season in the remaining parts of the country before deciding on a course of action.

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According to PTI’s report, Singh stated that the scarcity of dairy products would be relatively lower in North India because the lean season has been delayed due to untimely rains in the last 20 days, resulting in cooler temperatures.

The official added that the actual cause of milk inflation is the increase in fodder prices. He explained that the fodder crop area has remained stagnant in the last four years, whereas the dairy sector has been growing annually at 6%, resulting in a shortage of fodder supply.  Furthermore, it is worth noting that India’s last import of dairy products was in 2011.