INDIA - The country's dairy sector will grow 15.6 per cent during the 2015-16 financial year, says Mumbai based rating and research firm, India Ratings & Research Pvt Limited (Ind-Ra), citing higher demand for dairy products.
Growth will be driven by increasing consumer buying power and high demand for dairy products, said the agency's report.
The report said: “We expect the dairy sector's market size to increase 15.6 per cent year-on-year (y-o-y) in FY16. Milk production is forecast to grow at 4.6 per cent y-o-y in FY16."
"The agency expects the dairy sector to remain one of the focus areas of the government to improve the economic well-being of rural population."
The agency said that dairy industry will grow to $89 billion in 2015-16 fiscal year from $48 billion recorded in fiscal year 2012-13. The milk production is expected to increase to 151 million tonnes by 2015-16 fiscal year from 138 million tonnes in 2013-14 fiscal year.
The government is striving to expand the milk production to 180-200 million tonnes by 2021-22 fiscal year to meet the growing demand and address the nutritional requirement of country.
Even though global milk and dairy product prices in 2014 have fallen, the domestic prices have been firm.
The agency expects the government to continue supporting the dairy sector, especially cooperative sector, in the form of capital expenditures and technological improvements.
"The sector will reap benefits from the federal government's increased focus on dairy development, enhanced availability of quality fodder, and promotion of bovine breeding, among other aspects of raising milk productivity," the report added.
"The government is also working on ensuring better transportation and storage options for milk and milk products."
India, being the world's largest milk producer, is "non-existent" on the global dairy platform, added the agency. India's dairy exports have remained sluggish due to low global demand, rising cost of domestic milk production and the abolition of skimmed milk powder export incentives by the government in July 2014.
India Ratings expects gross domestic product to grow at 6.5 per cent and agriculture at 2 per cent in FY16.