India may import dairy products if needed as there is a supply constraint for such items due to milk production remaining stagnant in the last fiscal year. This has led to an increase in milk prices over the last few months that has been 14 to 15 per cent, much more than the inflation.
According to a top official of the Ministry of Animal Husbandry and Dairy, the Government will intervene to import dairy products like butter and ghee, if required, after assessing the stock position of milk in Southern states, where the flushing (peak production) season has started now. Milk output in the country stood at 221 million tonne in 2021-22, up 6.25 per cent from 208 million tonne in the previous year, as per the official data.
Addressing a press conference, Animal Husbandry and Dairy Secretary Rajesh Kumar Singh said the country’s milk production remained stagnant in the 2022-23 fiscal due to lumpy skin disease in cattle, while the domestic demand grew by 8-10 per cent in the same period because of a rebound in the post-pandemic demand. “There is no constraint in milk supply as such in the country...There is an adequate inventory of skimmed milk powder (SMP). But in the case of dairy products, especially fats, butter and ghee etc, the stocks are lower than the previous year,” he said.
The government will intervene to import dairy products like butter and ghee, if required, after assessing the stock position of milk in Southern states, where the flushing (peak production) season has started now, he said. Singh, however, observed that the imports may not be beneficial at this point in time as international prices in recent months are ruling firm. “If global prices are high, there is no point in importing. We will assess the flush season in the rest of the country and then take a call,” he said. The shortage will be less in north India where the lean season has been postponed with temperature cooling down due to untimely rains in the last 20 days, he added.
According to the secretary, the country’s milk output remained stagnant due to the impact of lumpy skin disease that killed 1.89 lakh cattle last year and the post-pandemic rebound in milk demand.
“The impact of lumpy skin disease on cattle can be felt to the extent that the total milk production is a little stagnant. Normally, milk production has been growing at 6 per cent annually. However this year (2022-23), it will be either stagnant or grow at 1-2 per cent,” Singh said. Since the government takes into account the milk production data of the cooperative sector and not the entire private and unorganised sector, “we assume it will be stagnant,” Singh said. It is a true rise in fodder prices that has led to milk inflation. There is a problem in fodder supply as the fodder crop area has remained stagnant in the last four years, while the dairy sector has been growing annually at 6 per cent, he added.
According to experts, the spike is linked to rising input costs, the disruption caused by the pandemic, and global prices. Demand for milk dried up during the covid-19 lockdown in 2020 as hotels, sweetshops, and canteens closed down and weddings and other public functions got cancelled or curtailed. Prices of milk, cheese, butter, and skimmed milk powder, also crashed.
This compelled dairy farmers to hold limited livestock. Even the calves and dry cattle they were left with were mostly underfed. Those calves are now the milk producers but their produce is of low quality and quantity.