The current dairy market situation in India is passing through an interesting phase. We asked 23 questions at the beginning of this year to forecast the dairy sector . One of the questions was to check if we would be requiring winter clothes on Holi in north India. We saw a drop in temperature during March and a surge in cough and cold cases validated the existence of cold-weather.

Unprecedented rains and hail storms damaged the Rabi crops and are still a big threat to unharvested wheat crops. The meteorological department was apprehensive about the loss of the Rabi crop due to the early onslaught of heat waves. The reality is just the reverse ; and there is more crop damage due to cold-weather and rains than the heat-wave .

This weather is supporting animal productivity and it is assumed that the delayed flush may get extended till late April. As per some of the experts the milk availability will remain sufficient to meet the market demand for fresh category of products. Rain and slightly cold weather has not yet helped the ice-cream and curd segment to gain sufficient traction as expected in this part of the year.

Surprise, Surprise, Surprise

This is not a time for huge ghee demand. Still the ghee prices have started to move up at this time. The bandwidth of ghee prices is from Rs 350 to Rs 650 per kg. The milk prices in India at Bulk supplier level is Rs 4-7 per liter lesser than that of our traditional VLC system. Paneer and cheese are available from Rs 180 to Rs 550 per kgs.

The market is flooded with all kinds of milks, Ghee and SMP. It is high time for the regulator to step in and take necessary steps. It is almost meaningless to mention about huge quantities of Paneer and khoa being sold which are made out of palm oil and plant based derivatives.

Dairy is no more a single raw material industry

We as dairy technologists always took pride in saying that dairy is a single raw material industry. You control the quality of raw milk and rest is automatically taken care of. Today we are reinventing milk using milk based and plant based derivatives openly. All these threats are from the dairy players only. We have not yet considered the threats being posed by the new generation entrepreneurs with Vegan and plant based products.

Milk has become mlk or mylk. Someone has introduced Millet mlk in this year of Millets and everyone is celebrating that Rs 300 per liter product as an innovation. The regulator is unable to take any action as the case related to nomenclature of plant based products is subjudice. Companies are openly selling hydrogenated fats and plant based fats as Vegan Ghee and butter. The regulator has issued a notification as well as regulation on vegan products as well as on sales of plant based fats as vegan ghee but who cares?

Commercial adulteration

One of the sign of Kaliyug is that “Only those would be regarded as clever, who could rob others’ pockets”. Though I may sound too orthodox but I feel that Kaliyug has begun. Commercial intent to adulterate is reaching its pinnacle. I gave an interview in a business channel a few years back in which I shared reasons for milk adulteration in India. You may like to watch it here then click on the link below .

In this situation when milk is available as per the demand at least in most parts of north India. The crop waste due to climate change will again be coming back as fodder. SMP demand for curd , reconstitution and ice cream has not surged yet. Ghee will be in demand around July -August only.

In this backdrop I have a few questions to ask.

a. Who is driving the raw milk prices?

b. Who is pushing ghee and SMP prices while stocks of SMP are matching with this part of the year ?

c. Who is regulating free flow of milk products with plant based derivatives ?

d. Who is giving confidence to new-gen startups to use any dairy based term for their plant based products under the guise of Vegan?

Do share your comments and insights as it is not about the processors or marketers. It is more about the future of 80 million farmers out of which almost 70% are women dairy farmers.

A blog by Kuldeep Sharma Chief editor dairynews7x7