Nepal is facing a shortage of ghee and butter during the peak festive season, as declining milk production has reduced dairy processing volumes while demand for ghee has increased across the country.
The shortage is affecting both the state-owned Dairy Development Corporation (DDC) and private dairy companies. DDC currently holds around 50 tonnes of butter, while private dairies have reportedly confirmed that they have no ghee available.
Milk Production Decline Tightens Supply
The National Dairy Association of Nepal attributed the shortage partly to a sharp increase in festive demand. Consumption of ghee typically rises during Teej, Sohra Shraddha and the Dashain-Tihar period, while milk production declines during the same seasonal cycle.
Nepal is currently collecting around 3.2 million litres of milk per day, resulting in estimated daily ghee production of about 32,000 litres.
The supply pressure is particularly significant for DDC, which normally produces around 800,000 kg of butter annually. Its butter production has fallen by approximately two-thirds, limiting the raw material available for ghee production.
Ghee Prices Reach Rs 1,300 Per Kg
The supply shortage has pushed market prices higher. Ghee is selling at around Rs 1,300 per kg, while butter is priced at approximately Rs 900 per kg.
DDC is selling its ghee at Rs 1,250 per kg, below the reported market price. Nepal had previously imported ghee, but those imports have since stopped.
Festive Demand Adds Pressure
The shortage comes at a time when dairy consumption traditionally increases because of religious festivals and celebrations.
The National Dairy Association said the market did not experience the same level of shortage in previous years because ghee consumption did not rise as sharply. The combination of stronger demand and lower milk availability has made it difficult for manufacturers to replenish stocks.
Export Activity Continues
Despite the domestic supply pressure, Nepal's ghee sector is also developing export opportunities.
DDC shipped 420 kg of ghee in late July under an agreement involving a commitment to export at least 50 metric tonnes annually to Gulf countries. Private dairy companies currently export between 4,000 and 5,000 kg of ghee annually.
The contrasting domestic shortage and export ambitions highlight the importance of strengthening milk collection and processing capacity to ensure adequate supply during seasonal demand peaks.
For Nepal's dairy industry, the situation underlines how quickly seasonal changes in milk availability can translate into shortages of value-added products such as butter and ghee. Building adequate inventory during higher-production periods and improving supply-chain planning could become increasingly important for managing festive demand.
Source: Dairynews7x7 07 Oct, 2026 Read full story here
#DairyIndustry #NepalDairy #DairyNews7x7
Never miss an important dairy update
Follow DairyNews7x7 on Google to get live milk prices, policy alerts, and daily headlines directly in your feed.
