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Agri-Biz & Commodities - Dairy & Dairy Products


Milk output to touch record 96 million tonnes next year

G. Chandrashekhar

Mumbai , Nov. 3

MILK production in the country is expected to post a strong growth of four million tonnes (mt) in 2006 taking total output to a new high of 96 mt next year.

India is world's largest milk producer since the mid-1990s.

Increased fodder supplies, following a near-normal monsoon in 2005, are seen driving the output.

Consumption demand too is on the rise, driven by rising incomes and population growth.

Changing lifestyle - urbanisation, dietary habits, impulse buying - has heightened the demand for value-added dairy products round the year.

Yet, per capita consumption is relatively low at 230 grams a day. Also, there is a certain skew in milk consumption with the really needy - the economically vulnerable and malnourished - consuming much less.

Higher farmgate prices for raw or unprocessed milk are seen encouraging dairy farmers to upgrade the genetic stock of their animal and upgrade feeding practices. In addition, storage and transportation facilities (chilling rooms, refrigerated movement) help overcome regional shortages.

The continuing expansion of milk processing capacities in the private sector, the need to sustain fluid milk supplies during the lean season, and firm prices are expected to lead to an increase in total milk powder production to 2.90 lakh tonnes in 2006 (from 2.70 lakh tonnes in 2005), the Foreign Agriculture Service office of US Department of Agriculture (USDA) in New Delhi said in a recent report.

Production of non-fat dry milk is forecast at 1.90 lakh tonnes in 2006, constituting 66 per cent of total milk powder production.

Combined butter and ghee production is forecast to increase from 2.85 mt in 2005 to 3.20 mt in 2006 (2.40 mt of ghee (clarified/melted butter) and 8 lakh tonnes of butter - (including about 75,000 tonnes of white butter for table purposes)).

According to USDA, increased demand for value-added dairy products and growing private investment in dairy processing facilities (boosted by liberal credit policies and lower interest rates) are expected to provide further impetus to the country's milk production over the coming years.

The US is looking at the Indian market for supplying milk powder and butter oil.

Demand for imported processed cheese and other high-value dairy products appears to be another window of opportunity for American exports.

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