Dairy Outlook 2022 - Milk Prices Are Expected To Increase: ICICI Securities
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ICICI Securities Report
As highlighted in our CY21 outlook report, dairy companies under our coverage continued to report life-high margins in CY21. While there was some impact on revenues in H1 CY21 due to severe second wave of Covid-19 (April-June), demand returned stronger due to large vaccination drives across the nation in H2 CY21.
Milk procurement prices increased due to-
inflation in animal feed prices and
revival in demand from business-to-business customers.
Global skim milk powder prices increased ~13% which also impacted milk prices in India. However, we expect milk procurement prices to further increase in H1 CY22, leading to price hikes by all dairy companies.
In CY22, we model dairy companies to report a decline in margins.
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