Trend and Instability Analysis of Milk Prices in Major Markets of India

The growth rate of production and per capita availability of milk and growth rate, variability and convergence/divergence of retail prices of milk in the major consuming markets of India has been examined in this article using annual production and per capita availability of milk data for the period from 1980-81 to 2022-23 and deseasonalised monthly milk retail prices from 1975-76 to 2022-23 was utilized to study the growth rate, variability and convergence/divergence of retail prices of milk. The entire period was further divided into two sub-periods and Compound Annual Growth Rate (CAGR), Coefficient of Variation around the trend and Bandyopadhyay (1989) methodology were applied to examine the growth rate, variability, instability and convergence/divergence of milk retail prices. The study concluded that the production and per capita availability of milk was increasing continuously. The highest average milk retail price was recorded in Delhi market during TE2022. The growth rate of milk retail prices were increased in Delhi and Kolkata markets while in Mumbai and Chennai markets, it was reduced from sub-period I to sub-period II. The variability of milk retail prices were reduced from sub-period I to sub-period II in all the selected markets. The Mumbai market exhibited highest reduction in variability in milk retail prices while the Chennai market showed lowest reduction in retail price of milk from sub-period I to sub-period II. The positive and negative deviation trend lines were diverging during sub-period I while they were converging during sub-period II. This indicated that instability of milk retail price was reducing during sub-period II. The reduction of variability and instability in milk retail prices was caused by the increased production and per capita availability of milk, increased milk processing capacity and improvement in marketing infrastructure in the recent time.