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G. Chandrashekhar

MUMBAI, June 26

GLOBAL milk production which has been consistently rising over the last few years is set to reach a new high in the current year, thanks to significant contribution from India.

In 2002, world milk output is expected to rise by 1.5 per cent to a new high of 592.5 million tonnes, up from last year's 584 mt, according to Food and Agriculture Organisation (FAO).

While many major producers are likely to see an increase in their milk production, India followed by the US will make significant contribution to global output growth. The two countries will continue to share the number one and number two spot respectively as world's largest milk producers.

In developing countries, growth in milk production is expected to continue. India's milk production during the 2002-03 (April-March) marketing year could rise to 83 mt, from 81 mt estimated for last year. In 2000-01, the country's milk production was 79.3 mt.

It is heartening that milk output in India is increasing through improved yields per animal, rather than through growth in animal numbers. The increased commercialisation of the dairy industry, associated in part with rising urban demand and greater participation of the private sector in dairy processing, has acted as a stimulus to milk production, FAO observed.

International prices of milk products have been on the decline since mid-2001. While price decline concerned all commodities, milk powder was most affected. By April 2002, there were indications that international prices for dairy products had stabilised, but at extremely low levels.

Low international prices could lead to increased purchases of milk powder by countries in Southeast Asia and China, FAO said. The price outlook for the remainder of the current year is uncertain. But it appears that international prices have bottomed out, at historically low levels.

Prices could therefore rise during the second half of the year, depending on availability of supplies and import demand being sustained. Should a rise in price occur, the largest increase is expected in milk powder — in part as a counterbalance to the sharp fall in the price of these commodities since the second half of 2001.

Cheese prices could also increase. Given low levels of international demand, the price of butter could remain depressed during the remainder of 2002, FAO predicted.

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