India's Dairy Sector Might See Imports In 13 Years Due To Rising Prices

12 May 2023

India’s dairy industry is one of the fastest-growing industries in the world. It also ranks as the top dairy industry in the world among all the countries. Indian government’s statistics show that the production of milk grew from 210 million tonnes in 2020 to 221.1 million tons in 2021.

 

However, the industry is facing huge challenges in producing an enormous amount of milk from domestic production and farming households. Several factors have contributed to threats concerning lower production, and prices have risen by 9.3% in the CPI (consumer price index) on a yearly basis. This might influence the Indian dairy industry to import dairy products.

 

India’s Milk Imports and Exports

 

The yearly comparison of milk imports by India is shown below. The import data reveals that the imports of 2022, by total value, increased by 133.72% in percentage ($2.71 million), and in the sum of quantity, the imports increased by 73.23% in percentage ($429.42 thousand) compared to 2021.

 

 

 

The yearly comparison of milk exports by India in the evaluated export data below shows that the exports of 2022 compared to the exports of 2021, increased by 41.89% in the sum of quantity ($4.80 million), and by total exports in value, the exports increased by 8.21% ($9.93 million).

 

Imports and Exports – By Heading

 

The imports of milk from India for Chapter 04 (Dairy Produce) further shows a segregated form of import-export data for Headings level classification in this chapter. The values are calculated for the time period ranging from 2021 to the first quarter of 2023 (the availability of trade data),

 

The imports of milk without sugar for Heading 0401 amounted to $5.3 million, while milk with sugar for Heading 0402 amounted to $3.7 million. This implies a larger demand for milk without sugar and concentrations in India, more than milk with added sugar and concentrations.

 

The exports of milk without sugar for Heading 0401 amounted to $25.2 million, while milk with sugar for Heading 0402 amounted to $238.5 million of exports from India. This implies that milk with added sugar and concentrations is more demanded and supplied than milk without sugar.

 

 

 

 

 Top Import and Export Countries

 

The top importing countries for the milk imports of India for the time period following 2021 to Q1-2023 are France ($4.5 million), followed by Poland ($2.6 million), New Zealand ($893.2 million), the United Kingdom ($434.8 million), Ireland ($213.4 million) with other countries.

 

 

The top exporting countries for milk exports by India with the time period following 2021 to Q1-2023 are Bangladesh ($152.2 million), followed by Bhutan ($28 million), the United Arab Emirates ($24 million), Malaysia ($17.1 million), Sri Lanka ($7.3 million) with other countries.

 

 

Import-Export Quarterly Trends

 

The quarterly imports of milk in India shows that the year 2021 went through fluctuations and registered a growth in the consecutive year, in the first quarter of 2022. The import values of 2022 in each quarter show a similar pattern as the values of the imports in the quarters of 2021.

 

 

In the evaluation of milk export data, the value of exports in each quarter has shown fluctuations throughout the year 2021. The pattern in the imports of 2022 is similar to the pattern in 2021. The second quarter shows an increase, followed by a continuous decline in the value of exports.

 

 

Monthly Import-Export Values

 

Taking a further magnifying look into the imports and exports of milk from India as the quarterly trade, it can be seen that May was the highest common month, recording the highest growth in 2021 and 2022. However, by December 2022, the import value peaked at $635.6 thousand.

 

Taking a magnifying look further in the exports of milk by India in a quarterly flow, it can be seen that in 2021, while October registered the highest growth at $21.9 million; in 2022, March accounted for the highest growth as the total value of milk exports amounted to $20.7 million.

 

 

Milk Trade Forecast 2023

 

The forecast for milk’s import 2023 provides a glimpse into the possibility of values that can be recorded in the next year (from April 2023 to March 2024). The values show that imports will go through minor fluctuations, recording positive values while peaking at $1 million in March 2024 after the highest imports of $1.2 million in February 2023.

 

 

The forecast for milk’s export 2023 provides a glimpse into the possible growth and fall of export values in the next year (April 2023-March 2024). The values show that the exports will be going through fluctuations recording majorly the negative values while December 2023 recording the highest growth at $4.7 million, which will be the highest among all the shown values.

 

 

The rebound in the domestic demand for the milk and dairy products skyrocketed the production. While the market consumption grew, along with the output post-pandemic. In recent months, the dairy industry faces disruptions in the production while demand remained stagnant.

 

Several factors such as rise in fodder prices and lumpy skin disease in cattle resulted in lower productions of milk in the past months, leading to a rise in prices of milk in the county, and hence, now it is being speculated that the world’s biggest dairy exporting country will import certain dairy products.