Due to the COVID-19 pandemic, supply chains worldwide have been disrupted, and India has been facing a challenge in meeting the growing demand for dairy products due to stagnant milk production. Amid reports of a possible import of certain dairy products by India, the government has clarified that it has not taken any decision on the matter. This has caused apprehension among dairy farmers and stakeholders who are concerned about the impact of such a move on the domestic industry.
In this article, we will examine the reasons behind the stagnant milk production in India and the government’s stance on importing dairy products. The Indian dairy industry has been facing supply constraints due to stagnant milk production in the last fiscal year. In response, a government official had earlier suggested that the country may look into importing dairy products like butter and ghee if required. However, the government has not taken any decision on this matter as of yet.
As per official data, milk output in India reached 221 million tonnes in 2021-22, which is up by 6.25% from the previous year. Despite this increase, there has been a surge in domestic demand for dairy products, which has put pressure on the supply of these products. In particular, the supply of fats such as butter and ghee has been affected.
Rajesh Singh, Secretary of the Animal Husbandry department, noted that while there is no constraint in milk supply in the country, stocks of dairy products such as butter and ghee are lower than the previous year. He also stated that there is an adequate inventory of skimmed milk powder (SMP) available.
The government has clarified that it will only intervene to import dairy products like butter and ghee after assessing the stock position of milk in Southern states. The flushing season, which is the peak production season for milk, has just begun in Southern states. Singh added that the government will consider imports only if necessary and that the decision will be based on the assessment of the flush season in the rest of the country.
Singh also mentioned that international prices of dairy products have been firm in recent months, which may not make imports beneficial at present. The government will monitor the situation and take a call based on the price trends of dairy products.
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While Singh acknowledged that the shortage of dairy products may not be as significant in northern India, where the lean season has been postponed due to untimely rains resulting in cooler temperatures, the rise in fodder prices has led to milk inflation. Singh stated that the fodder crop area has remained stagnant in the last four years while the dairy sector has been growing annually at 6%.
It is important to note that the government takes into account milk production data from the cooperative sector and not the entire private and unorganized sector. Thus, it is assumed that milk production will be stagnant in the current fiscal year.
In conclusion, while there have been concerns over supply constraints of dairy products in India, the government has clarified that it has not yet taken any decision on importing dairy products. The government will assess the situation based on the stock position of milk in Southern states and the flush season in the rest of the country.
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