With a nearly two-fold increase in dairy product exports last fiscal year, along with higher consumption during Diwali, the supply pipeline and stockpiles of butter and ghee were drained.
The Agricultural and Processed Foods Export Development Authority (Apeda) has compiled statistics showing that India exported 19,954 metric tonnes of butter in 2021–22, about four-and-a-half times more than the previous year’s quantity of 4,449 metric tonnes.
Exports of skimmed milk powder increased to 46,285 metric tonnes in the year ended March 31, 2022, a nearly three-and-a-half-fold increase, while shipments of ghee rose close to 10% to 10,689 metric tons. Generally, the value of dairy product exports increased to $392 million from $201 million. Bangladesh, the UAE, and Bahrain were the top three destinations to receive Indian dairy products in fiscal 2022.
Local consumption, especially of ghee, butter, and cheese, was strong during the festivals, which Indians celebrated in a grand way after two painful years of COVID.
Devendra Shah, chairman of Pune-based Parag Milk Foods, said that there was not enough supply in the pipeline, as exports of skim milk powder and butter were good in the previous year (FY22).
Amul is the largest exporter of dairy products from India. Amul butter, which has more than 90% of the butter market, has disappeared from the market across the country. Amul diverted about 10–11% more milk for liquid milk consumption during the last 2-3 months, adding to the shortage of butter and ghee.According to trade sources, the profit margins in liquid milk are higher than those in other milk products. RS Sodhi, MD of the Gujarat Cooperative Milk Marketing Federation, which owns the Amul brand, said: “Selling milk is our first priority, and there was a substantial increase in demand for full-fat liquid milk during the Diwali season.” Normally, about 60% of our milk collection is sold as liquid milk. However, during the last 2-3 months, we had to divert 11% more milk toward the liquid milk segment.