India: Milk production to increase as consumption picks up

The Indian dairy industry is expected to grow by 9-11% in the current fiscal year. However, higher procurement prices and operating costs are likely to impact profit margins.In its report on the Indian Dairy Sector, ratings agency Icra has said domestic milk production is estimated to increase by 5-6% in FY2022, supported by a normal monsoon and early onset of the flush season in some regions. “Post the moderate impact of pandemic, the industry has witnessed steady recovery in consumption across end-segments. This has been further aided by improving pace of vaccination, fall in fresh Covid-19 cases, revival in economic activities and demand from institutional and HoReCa segments, which too has recovered sharply,” says the report.Liquid milk sales continue to be supported by inelastic nature of demand while increasing consumption of value-added dairy products (VADP)s like ghee, butter, curd, cheese etc., support the overall dairy sales, the report states. “With stable milk ...