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Why Indian Dairy Industry Has a Promising Future In Exports

India’s total exports of dairy products were worth $ 404 million between April 2018 and February 2019, up 56 per cent from $260 million

By Content Writer
Why Indian Dairy Industry Has a Promising Future In Exports

The Indian dairy market is amongst the largest and fastest growing markets in the world.  India is also recognised to be the lowest cost milk producer in the world. One of the major reasons behind this would be, unlike large scale dairy farms in Europe, milk production and selling are crucial to the livelihood of over 600 million people in rural India with a herd size of 1-3 milch animals.

The dairy sector has become among the highest gross value sectors in agriculture with higher prices and correspondingly higher value of milk production. With the globalization of the dairy industry, there has been a paradigm shift of international dairy markets from being supply driven to demand driven. This deficit has increased the demand for exports of Indian dairy products.

According to a recent report, India’s dairy exports have achieved the second best show ever in this financial year, after 4 years of slow down. India’s total exports of dairy products were worth $ 404 million between April 2018 and February 2019, up 56 per cent from $260 million in the comparable period last year. This is due to the deficit-led global price increase in skimmed milk powder (SMP) and other milk products. Here the reasons why Indian dairy exports are flourishing and have a profitable future.

Rising Demand in International Market

Demand for dairy products in the International market is likely to grow significantly in the coming years, driven by more consumers, higher incomes and greater interest in nutrition. The demand for quality dairy products is rising and production is also rising in many developing countries.  Consumption of processed and packaged dairy products is increasing in urban areas. Because of the increasing competition from the private sector, several national and international brands have entered the market and expanded consumers’ expectation of quality.

Price Trends in the Dairy Industry

The prices of global dairy products increased to its peak and are expected to rise in nominal terms. International prices of butter, whole milk powder and cheese rose, underpinned by increased import demand in anticipation of a tightening in export availabilities on a seasonal decline in milk production. World market prices are expected to be 10% higher for SMP and 30% higher for butter during the present decade ending 2022.

Changing Lifestyle Pattern

There has been a growing wave of Keto Diet all over the world. With its fast and effective results for weight loss, the Ketogenic diet has become the most sought after diet plan. The ketogenic diet includes lots of fats, like cheese. This has increased the demand for dairy products and is likely to bring opportunities to the dairy industry.

The perceived benefits among the consumers of various bacteria strains have made Pro-biotic sector among the fastest growing dairy business. Though the health claims of functional dairy products are being revisited in several countries, it provides tremendous marketing opportunities for high value-added dairy products.

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