Milk production is likely to reach about 190 million tonnes in 2015 from current level of about 123 million tonnes, found the study, Indian Dairy Industry: The Way Ahead.
Highlighting the domestic demand, ASSOCHAM secretary general D S Rawat said that while India, the world’s largest milk producer, accounts for nearly 20% of total milk production of the world, “almost all of it gets consumed domestically.”
“Growing at about 10% annually, the Indian dairy industry is predominantly controlled by the unorganised sector which accounts for nearly 85%,” he said.
The report also said that that owing to conventional dietary habits of Indian households, about 60% of milk produced is consumed in the liquid form.
The rest, the report said, is consumed in the form of butter, clarified butter, cheese, curd, cottage cheese, ice cream, dairy whiteners and traditional sweets.
Opportunities galore in dairy, but roadblocks remain
The report added that there is enormous scope for growth for companies that put their bets on value-added products including custards, desserts, puddings, sauces, mousse, stirred yogurt, and nectars.
The growth, said the research, would be fueled by demand mainly from in urban centres, which are going to see a phenomenal growth due to growing population with higher disposable income and greater health consciousness.
But the study pointed out that there are still some pain points for the dairy sector in the spiraling input costs and lack of fodder from the farming sector which is resulting in low yield from cattle.
Moreover, the report found that the lack of trained and skilled labour, poor cold storage infrastructure and an opaque milk pricing system are hampering the retail end of the dairy cycle.
Rawat added that the private sector companies could then play a pivotal role in reducing the cost of production by employing advanced techniques, providing breeding facilities for cattle and improving the health of the dairy animals.
“This apart from developing proper dairy production, processing and marketing infrastructure,” said Rawat.
Rawat added that about 8 million Indian rural families are currently engaged in dairy production and that the rural market consumes over half of the total milk produced in the country.
The report also disclosed that Andhra Pradesh, Bihar, Haryana, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh are leading milk producing States in India.