Di: Ester Venturelli
India is the main milk producer in the world. Nevertheless, domestic production is generally equal to consumption and the Country has a self-sufficiency of about 100%.
This year, though, we could observe dynamics that are very different from the ones to which we are used. Indian milk productions are influenced by several adverse factors that are causing a reduction of milk deliveries.
During the Coronavirus pandemic, dairy demand in India stopped, leading to a price drop. This led local farmers to limit the dimension of their herd. Since then, the recovery of productions has been slow also due to the rising costs of inputs following the post-Covid demand recovery and the war between Russia and Ukraine.
But that is not the only problem.
During 2022, the Country has been hit by an epidemic of Lumpy Skin Disease that, according to the estimates, has infected more than 300.000 heads. Even though the disease is not contagious for humans, its socio-economic impact is significant. Infected cattle show fever and skin lesions together with other complications that weaken the animal. Although the mortality associated with the disease is low, the recovery is rather slow. Indian milk productions have been significantly reduced.
Moreover, in the last months, India was hit by heat waves that damaged harvests, reducing wheat and fodder availability.
In this context of slowed production, demand, after recovering from the stop due to Covid, has increased. The result of the disequilibrium between offer and demand has been a significant rise of retail prices.
Domestic market tensions opened the doors to international markets and the Country’s dairy imports already recorded important increases. The Government is evaluating the removal of import taxes on dairy products to alleviate the market tensions.