INDIA – India’s fluid milk production is forecast to rise from an estimated 194.8 MMT in CY 2020 to 199.0 MMT in CY 2021, according to the latest projections by United States Development Agency.
According to USDA, the rise is pegged on a normal 2021 monsoon season, and adequate feed availability.
Despite this growth, the US agency notes that longstanding challenges continue to prevent optimal Indian dairy sector growth.
These challenges include low Indian bovine animal milk productivity relative to those of developed countries; inconsistent availability of feed and fodder resources, and an inefficient cold chain network that is minimally accessed by milk producers.
With the above challenges continuing to dog the Indian dairy sector, The US Agency projects that any uptick in future demand for milk-based products will not be sufficiently covered by local demand, prompting the need for imports.
Already demand for milk is rising in the country due to a growing health consciousness and demand for healthier food including dairy products, exacerbated by the COVID-19 global pandemic and the nationwide shutdown that occurred March-April 2020.
The country’s growing population and rising incomes is also projected to put further strain on India’s dairy sector capacity to sufficiently meet the demand of its consumers.
USDA notes that Non-Fat Dried Milk (NFDM) and butter consumption in CY 2021 will rise to 675,000 MT (up 5.5 percent) and 6.3 MMT (up 2.5 percent), respectively.
In addition Indian consumers, especially those with higher disposable income are projected to continue to demand value-added dairy products such as yogurt, nutrient based health drinks, buttermilk, processed cheeses (e.g.,mozzarella, spread, flavored and spiced).
Additionally, the demand for ghee (clarified butter) and butter will continue to be robust, with ghee among the most consumed value-added dairy products in the coming years.
2021 Milk Production and Export Projections
The 2021 NFDM production is forecast to grow three percent to 680,000 MT on expectation of growing domestic demand for reconstituted milk during the summer when milk production declines due to high temperatures, dry weather, and poor pasture growth.
NFDM consumption on the other hand, is expected to rise to 675,000 MT (up 5.5 percent) and butter to 6.3 MMT (up 2.5 percent).
USDA notes that Export demand for NDM is expected to modest.
Combined butter and ghee production will also rise 3.3 percent to 6.3 MMT on strong consumption demand from household and near-normal demand from bulk users.
According to the USDA, Indian butter exports will also slightly improve, from 16,000 MT to 25,000 MT in 2021 on the expectation of modest export demand.
Similarly, NFDM exports will rise to 20,000 MT (close to the five-year average) from an estimated 6,000 MT in CY 2020.
Overall, demand for milk and milk products in India is rising at a pace quicker than production.
The inefficiency in the sector is the key challenge that needs to be address, otherwise, India may become a net importer of dairy products in future.
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