News: India's dairy market will continue to grow at around 13-15% annually to FY2019/20 on the back of rising consumption of value-added products and the value chain becoming more efficient, according to a study by Netherlands-based financial services provider Rabobank. The market share of value-added products is also forecast to grow strongly. This growth will be come on the back of increased demand for higher protein diets, greater affordability due to rising disposable incomes, and rising awareness as well as availability of dairy, the report stated.
BMI View: India is well suited to large-scale dairy farming given the country's vast supply of arable land, and it has one of the world's largest dairy cattle herds. It is also the world's largest producer and consumer of milk. Expansion in the Indian dairy industry has been mainly led by private investors and cooperatives. Along with the rise of artificial insemination services, herd numbers have grown consistently. In 2012/13, we are expecting a 4.1% year-on-year increase in fluid milk production to 125.0mn tonnes, on the back of a 3.9% rise in the number of cows in milk (to 48.2mn head). Concerns over final output due to the late and precarious start of the monsoon in June 2012 eased as rainfall returned to average levels in August. We therefore believe any substantial damage to milk supply for the 2012/13 season has been avoided.