Stagnant milk output: Dairy imports may be allowed after a decade

India usually imports high-value milk products but not mass-consumed items

After more than a decade, India may look at importing dairy products, if needed, as there is a supply constraint for such items due to milk production remaining stagnant in the last fiscal year, Animal Husbandry and Dairy Secretary Rajesh Kumar Singh told reporters on Wednesday.

India last imported major dairy products in 2011, news agency PTI reported. India usually imports high-value milk products like casein or specialty cheese but not mass-consumed items, such as butter and ghee or even skimmed milk powder.

“The government will intervene to import dairy products like butter and ghee, if required, after assessing the stock position of milk in the southern states, where the flushing (peak production) season has started now,” PTI quoted Singh.

Milk output in the country was at 221 million tonnes (mt) in 2021-22, up 6.25 per cent, from 208 mt in the previous year, according to official data.

Milk prices in India have increased 12-15 per cent in the last 15 months. Experts said the hikes won’t halt before September-October 2023. The Consumer Price Index-based inflation in milk has risen from 3.81 per cent in February 2022 to 9.65 per cent in February 2023, according to the last available data.

Singh said the country’s milk production remained stagnant in 2022-23 due to lumpy skin disease in cattle, while domestic demand grew 8-10 per cent in the same period because of rebound in post-pandemic demand.

“There is no constraint on milk supply in the country... There is adequate inventory of skimmed milk powder. But in the case of dairy products, especially fats, butter, and ghee, the stocks are lower than the previous year," he added.

The government will intervene to import dairy products like butter and ghee, if required, after assessing the stock position of milk in the southern states, where the flushing (peak production) season has started now, Singh asserted.

The shortage will be less in North India where the lean season has been deferred with temperatures cooling down due to untimely rainfall in the last 20 days, he added.

According to Singh, the country’s milk output remained stagnant due to the impact of lumpy skin disease that killed 189,000 cattle last year and post-pandemic rebound in milk demand.

“The impact of lumpy skin disease on cattle can be felt to the extent that total milk production is somewhat stagnant. Normally, milk production has been growing at 6 per cent annually. However, this year, it will be either stagnant or grow at 1-2 per cent,” said Singh.

Since the government takes into account the milk production data of the co-operative sector and not the entire private and unorganised sector, “we assume it will be stagnant”, observed Singh.