India’s milk production, highest in the world, is estimated to touch a record 135.5 million tonnes next year on firming domestic demand and better prices, a study has said.

It is expected to be sufficient to meet the local demand, and there may not be significant export volumes of skimmed milk powder (SMP) even as the ban has been lifted on the same in June 2012.

“As a result of strong prices, active government support, and growing demand, USDA forecasts 2013 calendar year fluid milk production at a record 135.50 mt, 5 per cent more than 2012,” the US Department of Agriculture (USDA) said in its latest report.

Similarly, production of butter and ghee is estimated to increase by 5 per cent to 4.75 mt next year.

While fluid milk production is expected to continue increasing in 2013, production of non-fat dry milk is only expected to face marginal increases due to large stocks carried over from this year.

USDA also noted: “This estimate may fluctuate slightly in response to fodder availability and overall monsoon conditions in 2013.”

Dairy production

India accounts for about 17 per cent of the world’s total dairy production, and consumes almost all of it.

The report highlighted that over the last several years, India has experienced strong growth in demand for dairy products, which is estimated to be 6-8 per cent annually, approximately twice the growth rate of supply.

Given Indians’ preference for dairy over other proteins and rising dairy prices, the sector is attracting new public and private sector investment, it said.

Quoting industry sources, the report said that about 30 per cent of Indian dairy production is handled by the organised sector and 70 per cent by the unorganised sector.

Given Indian consumer preferences and trust for branded milk products, it is possible that the unorganised sector’s market share is slowly decreasing, it added.

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