India's 'Milk Price' General Election... Modi Shocked by Milkflation

Milk Prices Rise Over 9% in March
Feed Costs Increase as Grain Prices Climb
Milk Remains 'Out of Reach' for India's Poor

Soaring milk prices have emerged as a major variable shaking up India's political landscape ahead of next year's general election.

As public sentiment worsens due to 'milkflation (milk + inflation),' there is analysis suggesting it could hamper Prime Minister Narendra Modi's bid for a third term.

According to major foreign media on the 13th, the current average retail price of milk in India is 57.15 rupees per liter, a 12% increase compared to the same period last year.

The rise in milk prices in India is also confirmed by government statistics. Last month, India's consumer price inflation rate was below the central bank's target of 6%. However, milk, as an individual item, rose by 9.31%, significantly exceeding the overall consumer price inflation rate.

For impoverished households, the recently increased prices of milk and dairy products have become a 'pie in the sky' that is difficult to even put in their shopping baskets. In contrast, for the wealthy, milk and dairy products have become symbols showcasing their wealth and status, according to local foreign media reports.

The main causes of the milk price increase are cited as poor crop yields leading to higher feed costs and increased milk exports. As grain prices rise, feed costs soar, which in turn pushes up milk prices. In India, due to heavier-than-usual rainfall and heatwaves, grain prices jumped by a staggering 15.27% last month.

In 2020, the COVID-19 lockdown measures led to grocery stores closing and a decrease in demand for milk and dairy products, causing a reduction in livestock farming. With milk sales revenue declining, livestock rearing became difficult, ultimately leading to recent milk supply reductions and sharp price hikes, analysts say.

On the other hand, milk exports have increased. The Indian government exported milk worth $391.59 million in the 2021-2022 fiscal year, a significant rise compared to $321.96 million the previous year.

[Image source=Yonhap News]

Local Indian media have diagnosed milk as a potential political risk for the Modi government ahead of next summer's general election. The Modi administration operates a food program providing free rice and wheat monthly to 800 million people among India's 1.4 billion population who belong to the impoverished class. However, with recent price hikes causing living costs to surge, Indians have begun demanding additional support measures from the government. In India, the country with the largest impoverished population worldwide, stabilizing milk prices is considered a critical challenge that Prime Minister Modi must solve as he prepares for re-election, according to political circles both inside and outside the government.

However, milk prices are likely to remain unstable for the time being. With summer approaching, when demand for dairy products such as ice cream and yogurt surges, milk demand is expected to increase significantly. Madhavi Arora, an economist at MK Global, observed, "As we approach the peak period of milk demand, supply will become even more insufficient," adding, "Milk prices are expected to continue rising throughout this year."

Indian political columnist Nirja Choudhary said, "The rise in milk prices is an issue that affects ordinary people," and added, "Whether this issue becomes a political point depends on the opposition parties. The key is how effectively the opposition utilizes this issue and how they influence voters to vote in a particular direction."

This content was produced with the assistance of AI translation services.