Tue Sep 24 03:48:40 UTC 2024: ## Ghee Inflation Hits 41-Month Low, But Experts Warn of Potential Surge
**New Delhi:** Ghee inflation in India has reached a 41-month low of 0.21% in August, according to data released by the Statistics Ministry. This decline is attributed to a combination of factors, including a higher base effect from previous years and lower prices for animal feed and fodder. However, experts have cautioned that this low inflation could lead to a sudden price surge in the future.
The overall inflation rate for milk products has also been declining, with curd and condensed milk powder experiencing lower inflation. Conversely, butter has seen a higher inflation rate. Ghee, known for its perceived health benefits and use in religious practices, enjoys a high level of consumption in India.
Paras Jasrai, Senior Analyst at India Ratings & Research, explained that the recent low inflation in milk products is primarily due to the high base effect from 2023 and the sustained low prices of milk inputs. He added that despite price hikes by major dairy brands like Amul and Mother Dairy in June 2024, milk inflation has remained around 3%.
Dr R S Khanna, a dairy expert, clarified that the rise in food prices is not solely attributed to increasing milk prices. He highlighted that the inflation rate for liquid milk is actually lower than the overall food inflation rate. Moreover, most milk products, apart from liquid milk, have lower inflation rates.
Khanna explained that dairy players prioritize selling liquid milk due to its higher profitability. The prices of skimmed milk powder, on the other hand, fluctuate based on demand and supply. Butter, with its high demand, also sees higher inflation.
While the current declining inflation trend indicates price stabilization, experts caution that a prolonged period of low inflation could lead to a sudden surge in milk prices in the future due to the low base effect. They advocate for allowing milk prices to keep pace with food inflation to ensure fair returns for dairy farmers.
India, the world’s largest milk producer, boasts a significant dairy industry. Milk production has increased significantly in recent years, reaching 230.58 million tonnes in 2022-23. India also exported 63,738.47 million tonnes of dairy products worth $272.64 million in 2023-24.
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