Monday, January 16, 2017

29th Dairy Pulse 1st jan to 15th jan

Dear friends,

A very Happy New Year to you all. This is a very exciting year for dairy industry in particular. We may also call it as an year of  Dairytilisation wherein the most fragmented industry in the country would learn on how to make use of digital gateways to
digitalize the complete payment process across the value chain from Feed to Table. 

The year started on a good note with the Minister of agriculture sharing the increase in per capita availability of milk as well as milk production in India in 2015-16. The milk production has registered a growth rate of 6.28% during 2014-16, which is higher than last years growth rate of about 4 per cent and three times more than the world average growth of 2.2%.

Milk production in India has increased from 22 million ton in 1970 to 156 million ton in 2015-16, which shows a growth of 700 percent during last 46 years. As a result, the per capita availability of milk in India is 337 gram/day as compared to average world per capita availability of 229 gram/day. This must have been highest recorded growth in agri-commodity in India atleast in the primary production category.

Another news mentions about big leap taken up by private sector for Indian dairy development. Today the Chennai-based Hatsun Agro Product Ltd alone procures an average 26 lakh litres per day (LLPD) or close to 1 mt annually. Besides, there are at least 9 companies with an average milk procurement of 10-15 LLPD each (Parag Milk Foods, Schreiber Dynamix Dairies, Heritage Foods, Tirumala Milk Products, Kwality Ltd, Sterling Agro Industries, VRS Foods, Bhole Baba Milk Food Industries and Nestle India) and many others that do 5-10 LLPD (Prabhat Dairy, Indapur Dairy, Dodla Dairy, Creamline Dairy Products, SMC Foods, Milkfood, Gopaljee Dairy Foods, and Anik Industries).

On the other side  a major chunk of coopretaive sector total average milk procurement of around 415 LLPD in 2015-16 was accounted for by only 5 state-level federations: Gujarat (‘Amul’ at 170 LLPD), Karnataka (‘Nandini’ at 63 LLPD), Tamil Nadu (‘Aavin’ at 30 LLPD), Rajasthan (‘Saras’ at 25 LLPD) and Bihar (‘Sudha’ at 17 LLPD). The cooperative sector now basically comprises a few large players that are mainly into liquid milk marketing, whereas private dairies cover a host of medium-scale corporates, most of them post-1992 entrants and, interestingly, very few multinationals. 

By 2020, procurement by private dairies is projected to reach 28.93 mt, ahead of the 23.67 mt of cooperatives, according to the latest edition of the industry publication, Dairy India.
The report also mention that India would be `10-lakh crore market by 2020; and money is seen in liquid milk, dahi and khoa, not in cheese and butter.

Another report  predict huge demand for dairy products in the country this year. The prices of milk and milk products will increase by more than 10 per cent, which will facilitate more income for dairy farmers. Educated unemployed youths may emerge as entrepreneurs and venture into dairying. The country will witness spectacular growth in dairy processing units, they note. 

One of the reasons for such increase in market milk prices would be shortage of available milk powder by the end of March 2017 thereby forcing dairy companies to pay more money to farmers so as to get their share of raw milk during the summer.

As an insight we look forward to relaxed policies from the government of India to facilitate import of milk powder from global markets in summers of 2017. There has not been much of traction in the global prices. However the policy maker must make tradeoff between easing out milk availability to consumers at a reasonable rate or supporting dairy farmers to get higher prices.

We wish you a happy e-learning.

with best regards

Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)
C-49 Sector-65
Noida 201307

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