India’s dairy industry expects robust growth in revenue in the coming months with the early onset of summer fuelling demand for milk and milk products, prices of which have risen amid tight supplies.

“We expect the volume of milk and milk products to increase by 12-15% during the summer season, while the prices can increase by 10-12%. It means, we can see a value growth of 25-27%,” said RS Sodhi, president, Indian Dairy Association.

According to Sodhi, demand for dairy products has already surpassed the pre-Covid levels by 10-15%. Aiding this is the increasing use of products like buttermilk as a beverage, he said.

While demand has risen, supply of milk in the country has been decreasing, in part due to prevalence of lumpy skin disease, increase in cattle feed cost and higher export of ghee and butter in the previous year. During this period, several dairy firms have increased milk prices by Rs 2 per litre four to five times.

“It is possible that both the procurement as well as the consumer prices of milk may go up by another Rs 4-5 per litre, or 10%-12%, till June as demand is strong while supplies are tight,” said Kishore Indukuri, managing director of Hyderabad-based Sid’s Farm. “Our top line is growing. However, there is pressure on the bottom line, as we may not be able to pass on the entire rise in price of raw milk to consumers and absorb a part of it. We are banking on increase in demand for value-added dairy products” said Indukuri.

Currently, Indian dairy products are more expensive than in the rest of the world. “Price of almost all dairy products is more expensive by Rs 40-50 than the ruling international prices,” said Dashrath Mane, chairman of Pune-based Sonai Dairy.However, the price rise could also start impacting demand. “High increase in consumer prices will not be good for the long term demand,” said Sodhi.