According to the media reports, India may look at importing dairy products, if needed, as there is a supply constraint for such items due to milk production remaining stagnant in the last fiscal year.
Key points
- India last imported major dairy products in 2011.
- The government will intervene to import dairy products like butter and ghee, if required, after assessing the stock position of milk in the southern states, where the flushing (peak production) season has started now.
- India usually imports high-value milk products like casein or specialty cheese but not mass-consumed items, such as butter and ghee or even skimmed milk powder.
- Milk output in the country was at 221 million tonnes (mt) in 2021-22, up 6.25 per cent, from 208 mt in the previous year.
- Milk prices in India have increased 12-15 per cent in the last 15 months.
- The Consumer Price Index-based inflation in milk has risen from 3.81 per cent in February 2022 to 9.65 per cent in February 2023, according to the last available data.
- The country’s milk production remained stagnant in 2022-23 due to lumpy skin disease in cattle, while domestic demand grew 8-10 per cent in the same period because of rebound in post-pandemic demand.
- One big reason for the current crisis in milk, apart from high feed and fodder rates, is the abnormally weak flush season in FY23.
- Flush is the season that usually runs from October to March in North India.
- It is characterised by abundant milk supply and low prices.
- Usually, India produces around 550 million litres of milk per day, which goes up by almost 30 per cent during the flush season.
- During this season, dairy companies and cooperatives convert liquid milk into skimmed milk powder (SMP) and butter and store it for use during lean months — April- September.
