Rising demand drives milk production

Indian milk production in 2005 could touch a record 92 million tonne from an estimated 88 million tonne in 2004, assuming a normal monsoon and sustained rise in demand for milk and dairy products, said a report.

According to the Global Agriculture Information Network (GAIN), 2004 milk production benefited from increased fodder availability and better returns from dairy farming.

The share of high fat buffalo milk in total milk production rose to 57 per cent in 2004, driven by premium pricing for milk based on fat content, GAIN said.

The average producer price for fluid milk in March 2004 was Rs 12.50-14.90 per litre for buffalo milk compared with Rs 8.75-12.90 a litre for the leaner, low-fat cow's milk.

In the May-August period, supply of milk fell due to inadequate storage and transportation facilities, it admitted.

During this period, reconstituted milk, made from non-fat dry milk (NFDM) and butter oil, helped tide over the shortage.

GAIN said increased private investment in the sector aided by easy credit and liberal licensing policies were expected to step up to milk production.

Milk powder production was expected to touch 4,25,000 tonne in 2005 thanks to expanding private investment in the milk-processing sector, increasing demand for reconstituted milk during the lean season and higher milk product sales in general, it said.

NFDM production could touch 2,70,000 tonne in 2005, or 64 per cent of total milk powder production.

Butter or ghee production could rise from 2.60 million tonne this year to 2.85 million tonne in 2005. Roughly 65 per cent of total production was in the unorganised sector, GAIN pointed out.

Per capita milk consumption in 2004 rose slightly to 227 gram per day, below the World Health Organisation-recommended level of 283 gram, said the report.

There was significant increase in demand for value-added milk products. Ice cream consumption grew at 15 per cent per year to an estimated 140 million litre in 2004.

Prices for milk powder were rising worldwide and 2005 milk powder export could increase to 15,000 tonne from 5,000 tonne in 2004, said the report, but exports of butter could rise to 10,000 tonne if higher domestic production led to lower prices.