Milk prices would remain high till Diwali but may later begin to reduce once the flush season begins and feed prices start to drop, according to Rupinder Singh Sodhi, president of the Indian Dairy Association
In flush season animals naturally produce more milk and their fodder gets cheaper due to a drop in feed price.
In India, the price of milk has increased significantly by 14 to 15%, which is higher than the rate of inflation. After cereals, milk inflation has been the second-largest contributor to higher retail inflation in January and February.
According to the March CPI (consumer price index) data, milk prices increased 9.3% year over year. And while it is hoped that cereal prices will decline, milk prices are anticipated to increase.
The Indian Dairy Association's current president, RS Sodhi, who was also the former managing director of the Gujarat Cooperative Milk Marketing Federation, whose main brand is Amul, stated that he does not expect milk prices to drop until Diwali, which is normally observed in October or November.
He clarified that this is the only time when the market may have price stability.
Early on during the lockdown, milk production and consumption were both unaffected; nevertheless, consumption in the HoReCa (hotel, restaurant, and catering) sector substantially decreased, which caused an increase in milk commodity output. As milk commodities increased, prices for both commodities and the price of milk to farmers decreased.
The lockdown also restricted the movement of fodder, artificial insemination in dairy animals, restrictions on the movement of dairy animals, and the introduction of lumpy skin disease. As a result, farmers invested less in dairy, which reduced productivity, explained Sodhi in an interview with Outlook.