New Delhi: India's milk production is estimated to rise by 5 percent to 129 million tonnes (MT)  in the current calendar year on account of strong prices and growing demand, United States Department of Agriculture (USDA) said.

The country had produced 123 million tonnes of milk in 2011, it said.

"Calendar Year (CY) 2012 milk production is estimated at 129 million tonnes, 4.87 percent up over CY 2011.

CY 2011 fluid milk production is raised at 123 million tonnes, 1.23 percent higher than previous estimates reflecting strong monsoon and good fodder availability," USDA said in its latest report.

Non-fat Dairy Milk (NFDM) stocks grew significantly in 2012 as output rose in response to remunerative prices and the government's prohibition on milk powder exports, it added.

The government had imposed a ban on export of skimmed milk powder (SMP) in February last year due to rising prices of milk but had removed the ban in June 2012.

India produces approximately 17 percent of the world's total dairy production and consumes virtually all of this.

"The country follows a 'low-input/low-output' dairy output model characterised by production costs and yields amongst the lowest in the world", USDA said.

The CY 2012 production estimate for NFDM remains unchanged at 4,50,000 tonnes.

The US agency also revised the butter production estimate for 2012. Butter production has been revised up 2,000 tonnes to 4.53 million tonnes.

For 2011, the butter production has been revised upwards by 10,000 tonnes to 4.33 million tonnes due to good milk production and a favourable 2011 monsoon, it added.

According to government data, India, the world's largest producer of milk, had produced about 127 million tonnes of milk in the 2011-12 fiscal.


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