Dairy giants expect a 30% decrease in milk demand

NEW DELHI: Dairy giants in India have seen demand drop by around 30% as migrants left the country, said R S Sodhi, MD of GCMMF (Amul).

Initially, after closing, we had seen a 10-20% increase in sales due to the panic purchase, which led us to increase our milk purchases, Sodhi said. But currently the demand has fallen, as many people have abandoned large cities and towns.

Tea shops, restaurants and offices that remain closed have also had a role to play in falling demand for milk and dairy products, senior dairy company executives said. Other products that have witnessed a drop in sales include cheese, cream, ice and Curd because hotels and restaurants are closed or partially open.

“The volumes for daily dairy essential such as Curd , butter milk and lassi have dropped by about 20% due to reduced point of sales,” said a spokesperson. “However, we have been witnessing multi-fold increase in demand for categories such as ultra-high temperature (UHT) milk and dairy whitener, which has higher shelf life and can be stored for longer period of time.”

The seasonal ice cream category has also been affected, as cars have disappeared from the roads. With the migrant population absent, companies may have difficulty restarting the cart service once the shutdown ends, executives said.