Early Heatwave Threatens Indian Milk Markets with Extended Shortages
India’s dairy market is bracing for a prolonged lean season as summer conditions have arrived earlier than usual across many regions. Traditionally, liquid milk production declines during summer months, with dairy processors depending on skimmed milk powder (SMP) stocks to bridge the supply gap. However, this year, lower winter milk production has left SMP inventories weaker than normal, raising concerns over both availability and price stability.
It takes roughly 10 litres of milk to produce 1 kg of SMP, which is then reconstituted during the lean season to stabilize liquid milk supplies. With the double hit of early summer heat and thin SMP reserves, dairy processors may face challenges in maintaining market balance without pushing consumer prices up.
In January 2025, Amul made a rare move by reducing liquid milk prices by ₹1 per litre, but experts predict price corrections could now be imminent. The situation is likely to be more acute in southern states like Karnataka and Maharashtra where temperatures have already soared and fodder availability is becoming scarce.
Industry leaders stress the need for strategic stock management, timely procurement from high-surplus zones, and controlled release of SMP into the market to manage demand.
Industry Insight:
Early summers combined with low SMP stockpiles are a serious warning for India’s dairy sector. Top management and procurement heads must closely monitor regional supplies and plan intervention pricing strategies to navigate this extended lean phase.
Source : Dairynews7x7http://dairynews7x7.com April 17th 2025 Business Standard