India Tops In Milk Production

The country's white revolution has finally got international recognition with the UN Food and Agriculture Organisation declaring India to be the world's highest producer of milk, relegating the US to the second position.

Anticipating a production level of 74 million tonnes in 1998-99 (April-March) marketing year, the Food and Organisation report on the global food output says "this would make India the world's largest milk producing country". The US's milk production has been estimated at 71 million tonnes, at par with India's previous year's output.

The report points out that over 50 per cent of the country's milk comes from buffaloes. "Growth in Indian milk production has been sustained by an expansion in domestic demand, although per capita consumption is still a relatively modest 65 kg of milk equivalent per year," the report says.

The organisation expects the steady uptrend in milk output to endure in India as well as other developing countries, especially in Asia and Latin America. This optimism is based on the expectation of increased demand from the domestic markets of these countries.

The global milk output, however, is slated to rise only by a little over 1 per cent in 1998 _ from 547 million tonnes in the previous year to around 555 million tonne this year.

Australia and New Zealand are expected to register some increase in milk production despite adverse effects of dry weather. General optimism regarding the long-term future of the international dairy market and higher returns from dairying are the principal motives behind the expansion in output in both these countries.

The organisation report points out that prices of most dairy products have fallen since 1997 due to reduced import demand, and are unlikely to rise this year. While demand is expected to remain sluggish, export availability are likely to increase, keeping prices weak for the rest of the current year. In fact, the prices of butter and milk powder may fall further during the year while that of cheese is expected to remain stable.

For many developing countries, lower world prices may mean imports threatening their domestic dairy industry. However, this may be limited in those developing nations where much of milk production and distribution takes place outside the framework of the formal processing sector, the main user of the imported stuff. In the case of South East Asia, the sharp devaluation of the currency of a number of countries against the US dollar has meant that domestic milk prices (in dollar terms) fell below international levels and, hence, their dairy sectors should not be adversely affected by outside competition, the report maintains.