India Faces High Milk Prices as Demand Surges: Impact of Epidemic on Livestock

India, the world’s largest producer of dairy products, is grappling with the challenge of soaring milk prices. The prices are expected to persistently rise until November this year.

A former managing director of Gujarat Cooperative Milk Marketing Foundation, India’s leading dairy company, stated, “Over the past 15 months, we have witnessed an astronomical surge in milk and milk product prices, with a staggering increase of 14-15%.”

The escalation in milk and dairy prices in India can be attributed to the escalating costs of cattle feed, the surge in demand for milk for ice cream production, and the repercussions of the epidemic on livestock herds, among other factors.

India holds a significant position as the world’s largest milk producer, contributing to approximately 22% of the global milk production. It is followed by the United States, China, Pakistan, and Brazil.

Data provided by Mintec, a food commodity price tracker, reveals that from November 2021 to the beginning of May this year, the price of milk in India surged from 46 rupees/liter to 53 rupees/liter ($0.55-0.64).

An analyst specializing in commodities at BMI, Fitch’s research firm, states that the soaring prices of animal feed and the seasonal spike in demand are key factors driving the increase in milk prices in India.

The National Dairy Development Board of India reports that a significant portion of cattle feed comprises corn, wheat, rice, and oats. The prices of these raw materials experienced a sharp rise in the middle of last year, which has continued to persist. The entrance of Russia into the war in Ukraine has disrupted the supply chain, leading to price hikes.

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