Women arrive at a milk collection center on the outskirts of Jaipur, India
In March 2022, the price of a full-cream packet of Amul milk was ₹60/litre. The cost of one liter sachet is now Rs 66. Milk prices are on the boil in India from 2021. The prices have been increased across all brands and Recent hike in Feb 2023 Amul’s fifth growth since 2021.
In April 2023, the average price of a liter of milk in India was ₹57, which is almost 12% higher than ₹51 in April 2022. The average price of milk is highest in Lucknow and Guwahati at ₹66/litre and ₹65 respectively. / liter, respectively. Milk prices are relatively low in southern cities like Bengaluru and Chennai.
In the last year, Ernakulam saw the highest increase in milk prices at 19%, followed by Mumbai, Lucknow and Jaipur with more than 10% increase ( chart 1,
Chart 1 | The chart shows the average retail price of a liter of milk in the month of April for the last six years.
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monetary policy committee of the central bank, whose meeting was held in the first week of April, said in a statement that high inflation in milk was one of the reasons driving up retail inflation. While retail inflation came down to 5.66 per cent in March, milk inflation continued to remain high. In the same month, milk inflation stood at 9.24%, close to the levels seen in February 2015 ( chart 2,
At the same time, concern has also been expressed over the country’s stable milk production in FY23. On 5 April, Animal Husbandry and Dairying Secretary Rajesh Kumar Singh said that the country was facing stagnation and if the situation did not change, the government would consider all options, including importing butter and ghee.
However, a few days later, Union Animal Husbandry and Dairying Minister Purushottam Rupala contradicted them and dismissed the government’s decision to consider a halt in milk production and the import of butter and ghee.
In FY22, India produced 221 million tonnes of milk, which is about 5.3% higher than FY21. While the absolute amount of milk produced has increased, year-on-year growth has slowed ( chart 3, It reached 6.6% in FY18.
According to Mr Singh, the country’s milk production will either remain stable or grow at the rate of 1%-2% in FY23. Several factors have resulted in the stagnation of milk production in the country. Initially, dairy farmers faced a reduction in demand due to COVID-19. As demand improved, outbreaks of lumpy dermatitis affected herds of cattle and buffalo, resulting in low milk yields. High fodder prices have also increased the cost of production.
According to a reply in the Lok Sabha, 32.8 lakh cattle were affected by the disease and 1.86 lakh died. Rajasthan, the second largest producer of milk, saw the maximum number of cases and cattle deaths. Rajasthan recorded 50% or close to 1.5 million cases and 76,000 cattle deaths, as shown in the figure map 4, While fodder inflation based on the Wholesale Price Index eased to 17.13% in March, the figure has remained in double digits for 14 months now, as shown in the figure. chart 5,
Map 4 | Map showing lumpy dermatitis cases and deaths
Finally, to Mr. Singh’s comment about the possibility of importing dairy products, it should be noted that India is the largest producer of milk in the world and accounts for 24% of the milk produced worldwide. as shown in chart 6The last time India imported large quantities of milk was in FY2012. Since then the import of milk has come down. While India continues to import relatively high quantities of whey, butter, paneer and curd, the share of milk in India’s import basket is quite small.
nihalani.j@thehindu.co.in
Source: National Dairy Development Board, Department of Consumer Affairs, Lok Sabha, Ministry of Statistics and Program Implementation and Ministry of Commerce
Read also: Lumpy skin disease, hike in fodder cost: Center fears ‘stagnation’ in milk production