India’s import of milk products jumped slightly over 1000% to $4.77 billion in 2022-23 even as export of fat items, such as clarified butter (ghee), surged to record levels due to high global prices, stoking the sharpest rise in domestic prices in a decade, data from the government-backed National Dairy Development Board (NDDB) show.

A dip in productivity of milch cattle due to the lumpy skin disease epidemic, which is estimated to have killed and emaciated over 300,000 cattle last year, also hobbled supplies in the world’s largest dairy producer, creating a demand-supply mismatch for the first time in several years, industry experts said.

Retail prices rose 15% over the past year, HT reported on March 4. Consumer inflation in milk rose 9.65% in February from a year ago, compared to an increase of 8.79% in the previous month, the largest buildup after cereals, hitting household budgets.

A similar situation of brisk exports amid lower domestic output had created shortages of wheat last year, until the government clamped a ban on overseas sales of the grain in May 2022. Imports of milk fat, such as butter, surged despite duties of nearly 40%, pointing to local shortages. India normally imports casein, a milk protein, rather than fat items such as butter.

The export of dairy products recorded a growth of 19.45% to $471 million in April-December 2022 from $395 million in the corresponding months of the previous year. However, within the dairy segment, the export of fat items, such as ghee, saw an unusual jump of about 40% as global demand soared.

“That’s the main reason for fat shortages. Poorly fed cattle during the Covid period and the lumpy skin disease also affected supplies. I see the restoration of the supply-demand balance soon. We are in a transition period,” said RG Chandramogan, managing director of the Chennai-based Hatsun Agro Products, the country’s largest private-sector dairy firm.

Milk and cereals prices have kept food inflation from cooling, making it harder for the government to bring overall price growth to a targeted 4% (+/-2%). Milk and milk items have a weight of 6.6% in the consumer food basket.

“The FAO Dairy Price Index rose steeply in 2022, reaching near-record highs in June that year, which was only 4% below its peak in December 2013,” the FAO’s review of the global dairy trade in 2022 states.
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According to Chandramogan, the country exported nearly 30,000 tonnes of ghee and butter in 2022-23. This is unprecedented because India normally doesn’t sell fat items overseas, he said.

On April 5, Union animal husbandry and dairy secretary Rajesh Kumar Singh said the Centre may “intervene” to ease duties and import dairy products such as butter and ghee, after assessing the stock position in southern states.

In the fiscal year ending March 31, milk output is estimated to have risen 1% compared to an average annual increase of nearly 6% over the past decade, HT had quoted an official as saying in a report published on March 4.

Farmers reduced the size of milch cattle as the deadly viral epidemic raged and cattle fairs were prohibited, said Rajesh Sharma, a dairy development officer in Sikar, Rajasthan, a major milk producer.

Source : industantimes.com/india-For more Details