What’s Driving Milk Prices Higher? ICICI Securities Explains
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ICICI Securities Report
Global skim milk powder (SMP) prices increased almost 20% in March 2021 versus November 2020.
We believe higher global SMP prices will result in higher exports of SMP and the milk procurement prices in India may also move upwards.
Reopening of the economy has led to higher demand for value added products. The demand from hotel-restaurant-cafe is also rising.
However, with rising Covid-19 cases, there is possibility of lockdown which may reduce milk demand with stable supply resulting in lower procurement prices.
Our channel checks suggest minor increase in milk procurement prices in December 2020-March 2021.
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