India’s total milk production to be at 628 mt by 2047, with a surplus of 100 mt
Protecting the dairy industry is very important for India as it provides livelihood to 80 million families, according to R S Sodhi, President of the India Dairy Association.
“It is business for the US. It’s an industry with only about 25,000 farmers, down from six lakhs 25 years ago, and primarily large-scale operations,” he told businessline. Sodhi was in Hyderabad to attend CLFMA annual conference here recently.
This mirrors India’s edible oil situation, where the country shifted from being more or less self-sufficient in the mid-90s to importing large volumes of oils from Indonesia and Malaysia.
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Looking ahead, by 2047, the country is projected to produce around 628 million tonnes of milk, contributing 45 per cent of global milk production and leaving a surplus of 100 million tonnes. Two-thirds of the world trade could come from India by 2047.
Regarding the milk pricing scenario, he stated that milk prices cannot be continuously increased for consumers because demand for food (including milk) is highly price-elastic, meaning consumption would decrease if prices rise too high.
Call to hike yield
“Given that India’s milk production is growing at 4.5-5 per cent annually, sustained consumption is crucial. Therefore, prices cannot increase proportionally to production costs. The strategy should be to avoid increasing milk prices more than the food inflation rate,” he said.
To avoid increasing consumer prices while ensuring farmer viability, Sodhi called for an increase in volumes and scale of production.
“We need to focus on producing more milk per animal and per kilogram of feed. This can be achieved through better breeding practices and bringing efficiencies in feed conversion,” he said.
He said farmers typically sought higher milk prices and lower cattle feed prices to boost profits. “Feeding costs account for 70 per cent of milk production expenses. Improving animal productivity and breeding practices are also crucial. We need to improve the feed conversion ratio so that they can produce more milk per kilogram from the same amount of feed,” he said.
US pressure
With the US putting pressure on many countries to import dairy products, it could result in the destabilisation of milk prices in Asia and South America, said R S Sodhi.
Though India is protecting its agriculture sector, Sodhs said if India is forced to import milk, it could also result in the destabilisation. India, however, has refused market access to US dairy products because they are being fed non-vegetarian food.
“India currently produces 240 million tonnes of milk. The global milk trade stands at 100 million tonnes. If India were to import even a mere 10 per cent of its current production, which amounts to 24 million tonnes, it would immediately increase the world demand by 24 per cent,” he said.
“If India’s requirement reaches 300 mt in another five years and it imports 10 per cent of that (30 mt), the world demand would jump from 100 to 130 mt. Such a substantial increase in demand, whether 24 per cent or 30-40 per cent, would cause world milk prices to skyrocket, potentially doubling,” he said.
The price destabilisation would be dangerous not only for India but also for other Asian and South American countries, including Bangladesh, Sri Lanka, and China.
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