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The government on Tuesday stated that there is no shortage of milk and other dairy products in the country, although prices have risen in recent months. “There has been an increase in milk prices and the Government is trying its best to address the problem by increasing milk production and availability,” Parshottam Rupala, minister of animal husbandry, fisheries and dairying said at a briefing.

While ruling out any possibility of milk products imports in the coming months, Rupala said that the country has adequate quantity of skimmed milk powder (SMP) and the milk chain is functioning smoothly.

He said that there is no shortage of milk and milk products in the country. There were reports of shortage, but that issue was ‘created’, and the ground reality is different, he said. He did not provide any timeline for reduction in milk prices.

Last month, Meenesh Shah, chairman & managing director, National Dairy Development Board had said that milk prices are unlikely to witness spikes in the coming months due to cooler temperature in April and parts of May, which has delayed the onset of ‘lean’ season, when milk production usually drops.

Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.

Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.

Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.

“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.

According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.

Source : Financial Express June 28th 2023

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