Last April, there were rumours in the press that India might be importing butter. The reasoning behind this rumour was the slower-than-expected milk production growth due to the lumpy skin disease (LSD) epidemic in India. At the same time, demand for dairy products continued to rise. Milk production has continued to grow at almost the same rate as in previous years, albeit at a slightly slower pace, and India will not need to import.
According to estimates made by Gira at our recent #GiraDairyClub, milk production should grow by 4.7% in 2023, i.e. slightly less than in previous years, during which milk production grew by more than 5% on average. Even so, just over 10 million tonnes of milk will be added to production, bringing the total to 227 million tonnes. In the end, the impact of the LSD epidemic was short-lived. The epidemic led to the slaughtering of around 100,000 animals, out of a herd of more than 126 million head…
Milk collection by dairies has continued to grow, rising from 19% of milk production in 2022 to around 21% in 2023, corresponding to an increase of 6.5 million tonnes of additional milk collection, or 15% compared with 2022. That’s more than Denmark’s annual volume!
Under these conditions, production will be capable of meeting strong growth in demand. This year, demand is expected to rise by 8-10% overall. Demand will be lower in the informal channels, where less well-off people are more affected by price increases, and higher for the middle classes living in towns, who are increasingly looking for the convenience and safety of products made in dairies.
What does this mean for foreign operators? The Indian dairy sector offers tremendous potential for development (at local level, as India remains a market closed to imports) right up the chain, from genetics to dairies. Indian operators are already present, but a market of 227 million tonnes of milk offers opportunities for new entrants.
Would you like to know more about India? Don’t hesitate to contact Veronique Aguera or Christophe Lafougere.
To find our more about Gira’s expertise in the global milk industry, or specific countries/regions, visit our Gira Dairy Club page or speak with Christophe Lafougère about your particular business needs. To stay informed on the latest news and hot topics that Gira is covering in the food industry, follow Gira’s Linkedin page.