September 18, 2008

South Asian countries discuss milk grid to balance supply and demand

South Asian countries needs to increase milk exports within the region so as to balance supply and demand needs, member countries at a two-day industry meeting said.

Members of the South Asian Association for Regional Co-operation (SAARC)  countries said that there is a need to increase the export of milk within the SAARC region to meet the increasing demands of the dairy products.

The SAARC's theme this year focuses on the 'Operationalisation of SAARC Milk Grid' where the need to develop a regional milk grid for sustaining the income of the milk producers and stable supply to consumers was discussed.

The regional milk grid will link surplus areas with deficit areas and hence will help overcome the inter -regional difference between the supply and demand for milk.


India and Pakistan have a high per capita milk production but in countries like Bangladesh, Bhutan, and also Sri Lanka, production is low and demand is high.

Almost two-thirds of the imported milk supply in the latter group comes from the Middle East while the export within the SAARC countries are considerably low.

Mr PK Joshi, director of National Centre of Agricultural Economics and Policy Research said efforts are underway to develop this milk grid within the SAARC region.

The discussion would focus on how local markets in developing countries within the SAARC region can be tapped to promote an integrated market oriented dairy development.

India is the dominant milk producer in the SAARC, producing almost 101 million tonnes in 2006-07, with production  growing at 4 percent  per year.  The SAARC region produces 140 million tonnes of milk a year.

India is among the world's largest and fastest growing markets for milk and milk products. The market size in value terms for milk and milk products, including the organized and unorganised sector, is US $ 47.6 billion (INR 2,000 billion), growing at nearly 7.5 percent annually.


The demand for value added milk products, such as cheese, dahi (Indian yoghurt) and probiotic drinks is increasing at a double digit rate. At present, India seems to be self-sufficient in meeting is requirement for milk and milk products. However, this may change in the near future given that demand is growing faster than supply. Any increase in milk production is dependent on the farmgate price received by the producer. Farmgate prices have increased by more than 50 percent in the last three years.


India ranks second in terms of milk production after the EU-27 and accounts for 15 percent of global production. The market for liquid milk, as well as value-added dairy products, is still largely dominated by the unorganized sector. India has an insignificant share of the global dairy trade, less than 1 per cent, despite being a leading producer of milk.

More than half the milk produced in India is buffalo milk.

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