Milk prices in India could remain elevated during the upcoming October–February flush season, despite the period normally bringing higher milk availability. Uneven monsoon conditions, rising feed and fodder costs and stronger festive demand are emerging as key factors that could limit the expected increase in supply.
The flush season generally provides additional milk supplies that help build stocks for the lean season. However, traders and industry experts expect production to remain under pressure this year because of uneven rainfall and higher input costs. Cattle feed prices in September are estimated to be 15–20% higher than a year earlier, with maize, de-oiled rice bran cake, soya-based ingredients and other grains becoming more expensive.
Milk prices have already undergone several increases since the beginning of the lean season in March. A senior industry official cited in the report said cow milk is currently around ₹42 per litre, about 30% higher than last year, while buffalo milk procurement prices have increased by a similar proportion. Four retail price hikes were reported between May and August.
The increase has extended beyond liquid milk to products such as cheese, curd and yoghurt. Consumer inflation for milk, including liquid milk and milk products, rose from 3.06% in January 2026 to 4.81% in August, while inflation for liquid milk increased from 2.89% to 3.91% over the same period.
Monsoon and Feed Costs Add Pressure
Industry executives have linked the outlook partly to monsoon conditions because rainfall affects the availability of both fodder and water. Parag Milk Foods COO Rahul Kumar said rainfall has been uneven across the country, with some regions experiencing floods while others, including parts of Maharashtra, received below-normal rainfall.
Another factor is the rising demand for dairy products, particularly paneer. Restrictions on analogue paneer in several states are expected to shift some demand towards dairy-based paneer, potentially increasing milk consumption among hotels, restaurants and other food-service businesses.
The changing demand pattern is also reflected in industry capacity expansion. Parag Milk Foods has announced an investment of around ₹100 crore to add 60 MT per day of paneer capacity at its Manchar facility in Maharashtra and Palamaner unit in Andhra Pradesh, taking its total capacity from 20 MT to 80 MT per day.
International dairy markets are another factor being watched by the industry. Global skimmed milk powder prices in the Oceania region were reported at around ₹3,667 per tonne in August, nearly 30% higher than a year earlier. Domestic SMP prices, however, were around ₹260–270 per kg and had not increased significantly year-on-year amid the prevailing demand-supply situation.
Milk fat prices have shown a different trend, with domestic butter prices around ₹540 per kg, approximately 20% higher than the same period last year. India is also estimated to hold around 1–1.5 lakh tonnes of SMP stocks, which can provide a buffer against supply shortages.
With Diwali falling later this year and milk availability not expected to increase sharply, an industry executive said another retail milk price increase of around ₹1–2 per litre could occur if festive demand strengthens. This remains an industry expectation rather than an announced price revision.
The combination of seasonal supply, feed economics, weather conditions, value-added dairy demand and global dairy commodity prices will therefore remain important factors for the Indian milk market as the flush season begins.
Source: Dairynews7x7 24 Sep, 2026 Read full story here
#DairyIndustry #MilkPrices #DairyFarmers #MilkProcurement #Paneer #DairyMarket #DairyNews7x7
