Due to an epidemic that has hit India's cattle and the COVID-19 pandemic, along with a young and growing population, the world's largest milk producer has end up having to import milk.
India, the world’s largest milk producer, is in the midst of a supply crisis. This has led to rising prices and rising imports, which runs the risk of becoming a serious political controversy besides an economic issue. The Reserve Bank of India’s interest-rate setting committee said on Thursday that one of the things causing high inflation is milk prices.
The cow economy is in a difficult phase owing to a combination of factors. The supply chain of the dairy industry was disrupted by covid (and affected before that, to some extent). In the past six months, an epidemic has hit India’s cattle. This combination has caused supply constraints at a time when demand is expanding strongly.
Milk is a necessary good, so demand is relatively less price-sensitive. The consumption of milk and dairy products...