The Hindu Business Line : Milk output poised to top 100 m tonnes

Indian milk output is poised to reach and breach the magical number of 100 million tonnes in 2007, thanks to the ongoing demand-side developments and supply-side promotions. India is world's single largest producer of milk since mid-1990s.

From 98.4 million tonnes (mt) in 2006 (95.1 mt in 2005), the country's milk production is projected to reach 101.9 mt next year, according to Food and Agriculture Organisation (FAO) of the United Nations.

India continues to witness expansion of over three per cent a year. Output growth is seen driven by increasing demand for value-added milk products on the consumer side and extensive dairy development programmes on the supply side.

Despite rising output, the per capita availability of liquid milk is woefully low at about 220 grams a day, according to experts. Also, despite being the largest producer, the level of integration of the country's dairy sector with the global economy is relatively low. The domestic market is largely insulated from global market influences, unlike other sectors such as edible oil.

After remaining soft for a major part of the year, international prices of major traded dairy products have begun to strengthen since October in the wake of drought problems in Australia and slowing exports from European Union where export refunds have been lowered from 2005 and intervention stocks are down by about 30 per cent. The changing export situation marks a major change for dairy markets, FAO said in its latest Food Outlook report.

World production of milk in 2006 is expected to reach 657 million tonnes (up 2.2 per cent from 2005). Preliminary projections for 2007 suggest this growth would continue. Enjoying a four per cent output growth, developing countries China, India and Pakistan as also South America largely account for the change in global output.

While developed countries continue to lose share, low cost emerging dairy producers and exporters are feeling encouraged by higher prices of last three years, FAO pointed out adding that an important question will be the impact of recent high feed grain prices.

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