Anecdotal accounts of dairy merchandise being unavailable in markets mixed with top inflation for milk and milk merchandise, contemporary hypothesis concerning the govt permitting milk imports, and its next refutation by way of the animal husbandry secretary of the federal government of India have created a large number of buzz a few conceivable provide chain disruption in India’s dairy sector. The undeniable fact that those occasions have adopted the outbreak of the lumpy pores and skin illness (LSD) amongst livestock – it’s estimated to have killed tens of 1000’s of animals – makes theories of wear to manufacturing capability extra credible. What can professional information let us know concerning the state of dairy manufacturing and a disaster (or loss of it) in India? Here are charts which attempt to resolution this query.
Has milk manufacturing fallen sharply in 2022-23?
IIP information displays a fall, however it is not the primary time.
India’s National Dairy Development Board (NDDB) publishes statistics for annual manufacturing of milk on its site. However, the newest numbers to be had at the NDDB’s site are for 2019-20. Another professional supply of knowledge on milk manufacturing is in Index of Industrial Production (IIP) numbers, which submit per month information on bodily amount of milk, milk powder, butter, ghee and ice cream. IIP numbers are to be had until January 2023. A comparability of knowledge from April 2022 to January 2023 displays a contraction in manufacturing of milk powder, butter and ghee out of those 5 classes. To make certain, nor is the contraction a first-time affair within the sequence which starts in 2011-12, neither is its extent the most important ever.
But IIP and NDDB information have no longer aligned up to now
To make certain, IIP numbers, particularly at a top stage of disaggregation don’t seem to be believed to be unfastened from issues. A comparability of IIP numbers on milk manufacturing with NDDB numbers displays this obviously. While IIP numbers display a fall in manufacturing of milk and comparable merchandise in a couple of yr since 2012-13, NDDB information displays a often expanding pattern all the way through. One of the explanations for this discrepancy might be the truth that IIP captures milk manufacturing which reaches processing gadgets (IIP is a survey of commercial gadgets) and large-scale dairies while NDDB’s estimation is on a much broader scale. However, the purpose about discrepancy in information stays.
Is the present spike in milk inflation remarkable?
No, if one is going by way of retail and wholesale inflation information for milk and milk merchandise up to now. Consumer Price Index (CPI) for milk and merchandise grew at 9.8% on an annual foundation within the month of February 2023. While that is the very best per month inflation since February 2015, milk inflation was once in double digits for a yr between 2014 and 2015. Wholesale Price Index (WPI) for dairy merchandise was once at 17% in February 2023. Here too, inflation has been upper up to now, and in contrast to relating to retail inflation, wholesale inflation for dairy turns out to have peaked and is now coming down .
Fodder inflation information displays that LSD’s surprise isn’t the one issue for spike in milk costs
Fodder inflation, as observed in WPI, has been in double digits for 13 consecutive months now, and it grew at 24.3% on an annual foundation within the month of February. When learn with wholesale inflation for dairy merchandise, there appears to be a detailed connection between upward thrust in fodder and dairy product inflation. This means that a part of contemporary dairy inflation is cost-push quite than pushed by way of only a fall in manufacturing because of lack of livestock by way of LSD.
So a long way there’s not anything strange about dairy business.
Has a surprising surge in dairy exports resulted in a scarcity for home intake? An HT research of business information for April-January length from the ministry of trade does no longer counsel this. In truth, overall dairy exports in 2022-23 fell by way of greater than $100 million in comparison to the similar length closing yr.
What explains the dearth of dairy merchandise and the speculations round want for enormous scale imports? This is among the uncommon events, the place we wish to suppose whether or not govt’s datasets are having the ability to seize a proper image of the placement handy.