Where did milk...

Devendra Shah, chairman of Ahmedabad-based Parag Milk Foods, told Business Standard production and consumption had risen in that year.

“The numbers appear surprising because they do not match the ground reality,” he said. About 40 per cent of the milk produced in India is consumed in villages, and the rest (60 per cent) is marketed, he added. International milk prices had crashed to multi-year lows nearing $1,600 per tonne in 2017. The biggest milk player in the country, Amul, said that the drop in consumer spending on milk might have entirely to do with the unorganised sector groups that market and distribute milk in less urbanised regions.

“About two-thirds of the milk market is unorganised. A supply glut in that market could have resulted in prices dropping to an extent that overall spending on milk and products declined,” Amul Managing Director R S Sodhi said.

While organised and branded retail prices of milk are administered to ensure remunerative prices for farmers, the unorganised segment responds to the impulses of the domestic market, which is heavily influenced by global milk (or milk powder) prices.

Some experts pointed out a very small proportion of milk output went into processing, to be converted into powder or other processed food format, and not consumed in liquid form. They said if a considerable proportion of milk went into processing, that would have partially explained the decline in the value of the milk consumed. Business Standard’s queries to the National Dairy Development Board (NDDB), the central institution that led the White Revolution and regularly monitors the dairy sector in the country, remained unanswered for two weeks.