Milk prices in India will remain volatile in near future, may stabilise after Diwali, says RS Sodhi

Milk and its by-products like ghee, cheese, and paneer have been an integral part of Indian cuisine and culture for centuries. However, in recent times, the prices of these dairy products have soared to unprecedented levels, causing concern among consumers, farmers, and policymakers. According to the latest data, the prices of milk and milk products in India have risen by 14 to 15 percent in the past 15 months, which is much higher than the overall inflation rate.

Experts point out that there are multiple factors contributing to the rise in milk prices in India. One of the primary reasons is the high demand for high-fat products like ghee, ice-creams, cheese, and paneer. With the changing lifestyles and dietary habits, more and more consumers are opting for these products, which require more milk to produce. As a result, the demand for milk has gone up significantly, leading to a shortage of supply and higher prices.

Another reason is the seasonal nature of milk production in India. As the majority of the milk in India comes from small-scale dairy farmers, who rely on natural grazing and feeding practices, the milk production varies significantly throughout the year. The period from April to November is considered a lean season for milk production, as it coincides with the monsoon season and the harvesting season for crops. During this time, the supply of milk decreases, and the prices go up.

However, the dairy industry leaders like RS Sodhi, the President of Indian Dairy Association, and Jayen Mehta, the Managing Director of Amul, have different opinions on the current situation. While Sodhi acknowledged that the prices have gone up, he also highlighted that the increase in milk prices is less than the food inflation rate, indicating that the dairy industry is still relatively stable. He also noted that farmers are getting better prices for their milk after a gap of 2-2.5 years, which is a positive sign for the industry.

Looking ahead, the experts predict that the milk prices in India will remain volatile in the near future. Sodhi predicted that the prices may stabilise after Diwali, which falls in November this year, as the milk production is likely to increase during the winter season.

On the other hand, Mehta emphasised that the increase in milk prices is in line with the inflation rate and that the demand for ice-cream has grown by 40 percent last year and is expected to increase by 20 percent this year as well.